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Irish first-quarter tax revenues 2.4 percent below target in rare miss
April 4, 2017 / 3:32 PM / 8 months ago

Irish first-quarter tax revenues 2.4 percent below target in rare miss

DUBLIN (Reuters) - Ireland collected 2.4 percent less tax than expected in the first quarter of the year, the finance ministry said on Tuesday, a rare shortfall that could affect the government’s fiscal plans for 2018 if it persisted.

Ireland’s economy has been the best performing in the European Union for the past three years, swelling the tax take in the process. The finance ministry has forecast that tax revenues will grow by 5.2 percent in 2017.

However revenues were only up 3.2 percent year-on-year by the end of March due to lower than expected returns from income tax, corporate tax and excise duties.

Corporate tax, the bulk of which is paid in later months and was responsible for much of the overall overperformance of the past two years, came in a third under profile while income tax was 3.9 percent behind target despite separate data on Tuesday pointing to further sharp falls in unemployment.

In contrast and contributing to a mixed picture, VAT returns were up over 17 percent year-on-year, or 3.4 percent better than expected.  

With expenditure 1.1 percent less than planned, the exchequer posted a 903 million-euro deficit at the end of March, compared to one of 1.17 billion at the same period a year ago.

Ireland aims to cut the deficit to 0.4 percent of gross domestic product this year as it moves towards its first balanced budget in a decade.

Reporting by Padraic Halpin; editing by John Stonestreet

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