Finian McGrath
Question:397 Mr. F. McGrath asked the Minister for Finance the reason income tax receipts were down 13.4% in 2001; and the reason the predicted rise of 8.6% in receipts did not materialise. [15577/02]
Written Answers. - Tax Yield.
Income tax receipts in 2001 were €9,347 million compared to a 2001 budget day target of €9,879 million – a shortfall of €532 million. This is equivalent to an increase of 2.6% over 2000 as compared to a budget target increase of 8.4%.
Like all taxes, income tax is affected by the level of activity in the economy. The 2001 budget day target for taxes was predicated on a forecast for economic growth of 8.8% in 2001. Preliminary results from the CSO now suggest that GDP grew by just 5.9% in 2001. Allied to the lower than expected growth in 2001, employment growth was lower at 49,000, than the 60,000 estimated at budget time.
A number of other factors also had a negative impact on income tax receipts in 2001. The 2001 Finance Bill introduced further income tax measures additional to those proposed on budget day. These measures, including the special savings investment account scheme, cost approximately €135 million in 2001.
In addition, the income tax package included in budget 2001 had, of necessity, to be costed on the basis of the information then available. Subsequent revisions to that information point to the cost of the tax package in 2001 being €242 million higher than originally estimated.
Finian McGrath
Question:398 Mr. F. McGrath asked the Minister for Finance if the Exchequer will be ?1 billion in the red by the end of 2002. [15578/02]
Based on the figures to the end of the third quarter published in the Exchequer returns on 2 October 2002 it is estimated that an Exchequer borrowing requirement of the order of €750 million will arise in 2002.