From Department of Finance; Department of Public Expenditure, NDP Delivery and Reform
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An Exchequer deficit of €6,219 million was recorded to end-September. This compares to a deficit of €9,373 million in the same period last year. The 12-month rolling Exchequer deficit, a much better indicator of the trend, is €9,163 million.
Given the timings of various periods of restrictions last year and the unprecedented nature of the impact of the pandemic, year-on-year comparisons are of limited value and may give a misleading impression of tax revenue performance. As such, a much better guide to tax outturn in 2021 is the comparison versus profile.
Reflecting a recovery in consumer spending, VAT receipts to end-September are €12,439 million, €893 million higher than profiled and up 26 per cent on the same period in 2020. Conversely, excise duties are behind profile, but only marginally at €66 million or 1.6 per cent. Corporation tax receipts continue to be robust and are €1,040 million, or 14.8 per cent higher than profiled year-to date. Income tax receipts are €155 million, or 0.8 per cent higher than profiled to end-September.
Total gross voted expenditure to end-September amounted to €60,669 million, €2,266 million or 3.9 per cent ahead on the same period in 2020 and €1,986 million, or 3.2 per cent below profile. The underspend vis-a-vis profile is the result of a number of factors including the closure of construction sites earlier in the year.
Commenting on the figures, the Minister for Finance, Paschal Donohoe T.D. said:
“Tax receipts to end-September offer another positive sign as to the speed of our economic recovery. VAT receipts, in particular, have rebounded very strongly as the economy opened up over the summer. Budget 2022 will further cement our recovery from the pandemic. Today’s better-than-expected tax receipts will not be used to fund additional expenditure. The €4.7 billion package to be delivered on Budget day strikes the right balance between expanding and improving our public services, investing in infrastructure and reducing the deficit. The State has responded in an unprecedented and extraordinary way over the past 18 months. Over €48 billion has been made available to protect incomes, save businesses and invest in our health service. As our society and economy returns to normal, so too must budgetary policy.”
The Minister for Public Expenditure and Reform, Michael McGrath T.D. said:
“At the end of August, gross voted expenditure totalled over €60.7 billion, nearly €2.3 billion ahead of expenditure levels for the same period last year. Current expenditure stands at €56.3 billion, with nearly 82 per cent of this, some €46.1 billion, relating to spending in the Departments of Education, Social Protection, Health, Education and Further and Higher Education, Research, Innovation and Science. This investment reflects the Government’s continued focus on protecting the most vulnerable in society and prioritising core social services against the impacts of Covid-19.
In relation to exceptional Covid-19 measures, the number of claimants of the Pandemic Unemployment Payment continues on a downward trajectory reflecting the reopening of society and the economy. As of the end of September week, just over 100,000 people are in receipt of a payment from the scheme. Since the beginning of this year, payments on this scheme and the Employment Wage Subsidy Scheme (EWSS) have totalled over €7.2 billion combined.
As set out in the Summer Economic Statement, Government is committed to a phased careful withdrawal of funding provided for exceptional measures related to Covid-19. This will be done in a way that supports our people and economy to recover and returns the public finances to a sustainable footing, with further details to be outlined as part of the forthcoming Budget 2022”.
ENDS
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