Tax payments in the first half of the year were some €800 million ahead of target as the total return in the six-month period came in ahead of €20 billion for the first time since 2007 .
Figures released this afternoon by the Department of Finance show that the State collected €20.62 billion in tax between January and June, €2.16 billion more than in the same period last year and €805 million more than foreseen in the budget . An unexpected advance in corporation tax payments accounts for €606 million the improvement over budget-day forecasts for tax receipts.
Overall net voted expenditure in the half year reached €20.42 billion, 1.5 per cent or €304 million below profile and €107 million or 0.5 per cent lower in year-on-year terms.
The Exchequer had a €292 million deficit at the end June, down from €4.93 billion on year ago. “The improvement in the Exchequer balance is driven by increased tax and non-tax receipts and a number of one-off transactions,” the Department said.
Once-off transactions
The once-off transactions included receipts from the sale of Permanent TSB contingent capital notes and from the sale of shares in the institution.
“Without the one-off transactions the improvement in the deficit would be €2.7 billion.”
While the jump in tax collection marks big improvement on 2014, the Department emphasised that €285 million in corporation tax receipts were delayed from June into July last year as a result of a new European payments systme.
“Taking this into account, tax receipts are up €1.87 billion (10 per cent) year-on-year. Tax revenues for the month of June were up €71 million (2.2 per cent) against the monthly profile.”
The figures reflect big corporation tax payments last month, with receipts in the month up €121 million on profile.
“On a cumulative basis, corporation tax receipts have been very strong so far this year and are now €606 million (28.1 per cent) higher than expected at €2.77 billion,” said the Department.
Tax heads
Adjusting for delayed payments last year, corporation tax receipts are up €724 million or 35.5 per cent year-on-year. “This reflects an improved trading performance across the board and some one off factors,” the Department said.
Income tax receipts rose €478 million year-on-year to €8.31 billion, “slightly above” profile by €54 million or 0.7 per cent. “For the month of June, income tax receipts amounted to €1.27 billion, which were exactly on profile,” the Department said.
VAT receipts of €6 billion represented an increase of €441 million or 7.9 per cent, above profile €36 million.
“VAT receipts for June, were €54 million (15.6 per cent) below profile, but as June is a non-due month, these monthly figures are of limited use on their own.”
The figures refelct €500 million in Central Bank surplus income, and a €1.55 billion rise to €4.98 billion in capital receipts.
“The main reasons for the increase is the transfer from the National Pension Reserve Fund to the Exchequer earlier this year and the sale of the Permanent TSB contingent capital note and the receipt of proceeds from the sale of shares in PTSB.”
