Taxes ‘mixed’ amid health overrun
Government tax revenues in August were “a mixed bag” and “a little disappointing” amid more health spending overruns, which will not reassure the finance minister ahead of next month’s budget, say analysts.
At €2.73bn, the Department of Finance figures show the Government took in €274m less in tax than anticipated in August, with all the big four tax sources — income, Vat, corporation tax, and excise duties — missing their targets.
Over the first eight months of the year, the exchequer took in €32.42bn in revenues, €100m less than anticipated.
The department said the outcome so far this year was “broadly in line with profile” and was up over 5% from a year earlier.
Davy analysts said even though indicators showed the economy was “buoyant” and timing issues might have played a part, the August exchequer returns were still “a little disappointing”.
It said: “Overall, the public finances are broadly in line with budget targets, but there will be precious room for manoeuvre in October’s budget for 2019.
“Moreover, a sharp overrun in the Department of Health is now developing.”
The Department of Finance said net voted current expenditure at €28,91bn in the first eight months was up 6.8% from a year earlier, with the Department of Health vote group running €312m above target.
Peter Vale, a tax partner at Grant Thornton, said the returns will influence the arithmetic in next month’s budget. “Overall, the figures can be best described as a mixed bag,” he said.
“Corporation tax, the poster boy of our tax revenue growth to date, actually dipped significantly in August. However, August is not a major month for corporation tax receipts and we wouldn’t read too much into this. Overall in the year to date, corporation tax gains are sheltering some significant deficits elsewhere, in particular, excise duties.”
