The Cabinet is today discussing the crisis in public finances at its first meeting after the August holiday break.
The latest official exchequer figures, which were released yesterday, reveal that tax revenues are continuing to plummet.
A Government spokesman said today's meeting is discussing the public finances and departments would update the meeting on the spending estimates process that has been ongoing during the summer months.
In July, the Government projected a tax shortfall of €3 billion for the year, but a rapid slowdown in consumer spending and a fall in stamp duty and capital gains tax receipts means that the shortfall for the year could exceed €5 billion.
Substantial cuts in public spending for next year now appear inevitable and are likely to be accompanied by increases in borrowing and taxation.
The exchequer returns, published yesterday, show that tax revenue at the end of August was €2.8 billion lower than expected. The total tax take for the first eight months of the year at €24.7 billion was 10 per cent behind budget projections and a full 9.4 per cent lower than in the same period last year.
All tax revenues were down for the first eight months. The biggest shortfall came in VAT receipts, which were €1.177 billion below projection, 11.4 per cent below target and 6 per cent down on last year. The slowdown in the construction industry was reflected in a shortfall in stamp duty of €480 million, a 45 per cent drop on last year, and in a shortfall in capital gains tax of €436 million, 39 per cent below target.
The Opposition parties last night accused the Government of failing in its duty to get to grips with the crisis in the public finances during the summer and taking its traditional August holiday as if there was nothing wrong.