Corporation tax boosts exchequer figures; overall revenues 1.5% better than expected
New figures show income tax, VAT and stamp duty are not delivering as much revenue as the Government expected.
However, exchequer returns published this evening show corporation tax continues to outperform expectations with nearly €650m more than expected coming in.
Nearly €33.5bn in tax revenues has been collected so far this year, of which €4.1bn came from Corporation Tax.
Overall, taxes are 1.5% better than expected and up 5.7% on the same nine months of last year.
Meanwhile, a special budget meeting of the Cabinet will take place on Thursday.
Ministers hope to finalise tax cuts and spending increases ahead of the budget next Tuesday.
Earlier Sinn Féin announced its alternative budget with more than €1bn in extra taxes and investment in services and infrastructure.
Tax partner at Grant Thornton Peter Vale said: "While today’s Exchequer figures likely come too late to influence next week’s Budget, the receipts will give some comfort to the Government that there is enough headroom to provide the anticipated €300m or so tax cuts.
"Of significance is the more positive income tax receipts for September, following a weak August. While the figures for September are below target, they are ahead of September 2015 and indicate that the previous month may have represented a blip inconsistent with the positive jobs market data. However, income tax figures in particular will be closely scrutinised in the coming months.
"VAT receipts have been a cause for concern in recent months. The figures in September show a slight improvement, with figures coming in ahead of target for the month, but still 2.7% behind forecast for the year as a whole.
"With the exception of certain sectors, in particular motor, increased disposable income is not translating into the expected spending. Brexit concerns may be further fuelling this trend. Whether further income tax cuts next year can reverse this pattern will be key.
"On the more positive side, corporation tax receipts continue to soar and are now over 18% ahead of target, most likely driven by the results of large MNCs with significant Irish operations."
