From Department of Finance; Department of Public Expenditure, NDP Delivery and Reform
Published on
Last updated on
An Exchequer deficit of €5,300 million was recorded to end-June. This compares to a deficit of €5,331 million in the same period last year. The 12-month rolling Exchequer deficit, a much better indicator of the trend, is €12,285 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 vs profile.
Income tax receipts continue to be robust and are €442 million, or 3.8 per cent higher than profiled to end-June. Similarly, corporation tax receipts to end-June, which includes the two significant payment months of May and June, were €449 million higher than profiled. Reflecting a recovery in consumer spending, VAT receipts are currently €335 million, or 4.9 per cent, higher than profiled and up 21.7 per cent on the same period in 2020. Conversely excise duties are behind profile, but only marginally at €16 million or 0.6 per cent.
Total gross voted expenditure to end-June amounted to €39,916 million, €1,540 million or 4 per cent ahead on the same period in 2020 and €1,717 million, or 4.1 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:
“Although we continue to borrow significant amounts of money in order to fight the pandemic, tax receipts to end-June show that we can look forward to the recovery with confidence. Income taxes and VAT, in particular, remain robust as businesses and consumers have shown remarkable adaptability and resilience. Despite continuing uncertainty, today’s figures show that we can look forward to a sustainable and broad based recovery”.
The Minister for Public Expenditure and Reform, Michael McGrath T.D. said:
“On a rolling twelve month basis, gross voted expenditure amounts to €87 billion, with almost €32 billion in the Department of Social Protection, reflecting the significant measures in place to support businesses and people’s incomes through schemes as the PUP and EWSS.
“The ability of Departments to deploy the record capital budget was severely constrained by Covid restrictions on the construction sector until May. I will be closely monitoring progress on capital spending in the second half of the year.
“While we are still facing uncertainty in relation to Covid, the rollout of the vaccine is supporting a recovery in society and the economy. As set out in the National Economic Recovery Plan, we intend to continue to support the recovery over the period ahead.”
ENDS
Notes to editors: