October 8, 2016 / 1:04 AM / a year ago

Ireland still sees 2016 tax take almost 2 percent above target

DUBLIN (Reuters) - Ireland still expects to collect almost 2 percent more tax than expected this year despite waning outperformance in recent months, the country’s finance ministry said on Saturday.

Ireland's Finance Minister Michael Noonan attends an interview with Reuters at his office in central Dublin February 11, 2014. REUTERS/Cathal McNaughton/File Photo

Ireland’s tax take was as much as 4 percent ahead of target by the end of May but slower than forecast growth in some parts of the domestic economy cut that to 1.5 percent at the end of September, data published earlier this week showed.

In an up-to-date forecast, the ministry said it expected the tax take to finish the year 1.9 percent ahead of target, the same outturn it saw the last time it updated the figures in June.

The outperformance will be driven for a second successive year by a surge in corporate tax receipts from Ireland’s large cluster of mainly foreign firms which the finance ministry sees coming in 14 percent ahead of expectations for a record return, it said in its annual pre-budget publication.

It also sees income tax returns, the largest tax category, recovering from slower than expected growth in recent months to finish the year 1 percent ahead of target, while VAT receipts, the second largest, will come in almost 2 percent below target.

The updated figures, released ahead of Tuesday’s budget for 2017, showed that if there was no policy changes next year, the state’s tax take would grow by 5 percent year-on-year, a similar increase to this year’s expected outcome.

The government plans to bring in a modest package of tax cuts and spending increases for next year totalling around 1 billion euros, with two-thirds of the expansion going towards public expenditure.

Reporting by Padraic Halpin; Editing by Andrew Hay

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