An tSaoi:The Taoiseach sees positive signs in the May Exchequer figures, which were not as bad as expected. Tax paid in May was €64M over the much-reduced target. He glossed over the decline of €428M from May 2008 or the €982M from May 2007. It shows if you cut expectations for long enough you will finally get close!
However just three of the eight taxheads are on or above target, with five well below expectation. RTÉ have a good summary sheet, which sets out the figures.
Let us have a closer examination of the so-called encouraging figures. Apart from the banks very little of the Corporation Tax payable in Ireland arises from real economic activity in Ireland. Most is paid by a handful of multi-nationals and a few of these have clearly come up trumps this month. The target was €451M and the Revenue received €606M. The change in payment dates for Corporation Tax may have also had an influence, but certainly will next month when companies with a 31st December year end must make their first payment.
Income Tax is up because of the levies hitting higher those in employment. But the amount of money being paid in ex gratia redundancy payments is probably a major contributor. The yield is still well previous Mays despite the substantial increase in individual liabilities.
The most intriguing figure is that of Excise duty. However this may be due to technical issues such as large pre Budget clearance/withdrawals. Next month’s figures should confirm the real trend.
Taking these points into account, there are no encouraging signs with the likely underlying trend being around €200M below target and a final tax figure in the region of €31,500M to €32,000M.