Volatility returns to hit exchequer tax returns in April

In the non-Vat month of April, it collected only €6m from this tax source, or €169m less than it had anticipated from Vat tax revenues because of much higher than expected repayments in the month.

For the first four months of the year, Vat brought in over €4.9bn or €191m less than was anticipated at this stage of the year.

Higher than anticipated repayments also meant corporation tax underperformed by a wide margin and brought in €110m less than was anticipated in the month.

However, at €468m, corporation tax receipts this year are already running well ahead of their target even before the fourth quarter when many companies settle their tax bills.

In recent years, corporation tax receipts have swelled the Government’s coffers and the department has predicted they will rise again strongly this year.

At over €1.9bn, income tax receipts were on target in April but were short of target by €191m over the full four months, after underperforming strongly in February, the department said.

But another of the big four tax sources, excise duties, came in ahead of target in April and was running ahead of target by €142m over the first four months of the year.

“April was a poor month for tax revenues at 6% the monthly target, but on the back of volatile Vat and corporation tax repayments that tell us little about underlying trends,” said Conall Mac Coille, chief economist at broker Davy.

For now, expenditure discipline is being maintained. Current expenditure was €19bn in the four months to April, 0.8% inside budget limits, and up 4% on the year.

"Capital expenditure was €1.4bn, up 26% on the year, but within budget limits.

“Overall, this leaves the items that feed into the general government balance €42m ahead of target.”