Dáil Éireann debate -
Tuesday, 8 Apr 2003

Vol. 564 No. 5

Written Answers - Tax Yield.

Bernard J. Durkan

Question:

146 Mr. Durkan asked the Minister for Finance if receipts in respect of income tax and other revenues to date are in accord with budgetary projections; if he proposes any action in this regard; and if he will make a statement on the matter. [10020/03]

Minister for Finance (Mr. McCreevy)

Exchequer tax revenue received to the end of the first quarter of 2003 represents 22% of the total receipts for 2003 targeted at budget time. Overall, tax revenue is broadly in line with the profile.

The budget day target for income tax in 2003 is €9,307 million. At the end of the first quarter of 2003, the Exchequer had received €2,012 million in income tax or close to 22% of the target for the year. In terms of the Revenue Commissioners' profile of tax revenue in 2003, published in January this year, Exchequer income tax receipts were some €152 million below the net receipts for income tax which had been expected to be collected by Revenue in the first three months of the year.

Certain other taxes, including corporation tax, are also currently performing below the collection targets set by the Revenue Commissioners while others, including VAT, are performing above the targets set.

Bernard J. Durkan

Question:

147 Mr. Durkan asked the Minister for Finance the areas in respect of which he is most satisfied arising from the quarterly returns; and if he will make a statement on the matter. [10022/03]

Bernard J. Durkan

Question:

148 Mr. Durkan asked the Minister for Finance arising from the recently published quarterly returns, the headings in respect of which he is most concerned; and if he will make a statement on the matter. [10042/03]

Minister for Finance (Mr. McCreevy)

I propose to take Questions Nos. 147 and 148 together.

The targets set out in budget 2003 are annual targets for 2003 as a whole. At the end of the first quarter, the Exchequer position, including expenditure and tax receipts overall, is in line with expectations.

In overall terms, tax receipts to end March were in line with the profile published in January. Tax revenue, at €6,956 million was 22% of the budget day target. Year-on-year tax receipts were 11.9% higher than the same period in 2002. The full year budget target for tax revenue is an increase of 8% over 2002. Individual tax heads varied in performance. Stamp duty and VAT performed particularly well. Corporation tax and income tax performed less well.

To end March, income tax receipts were down 6.8% on the same period last year and a budget target of an increase of 2.7% for the whole year. Corporation tax to end March was 31% below profile. However, it was significantly up on the same period last year, at an increase of 146.4%. This compares to a budget target of an increase of 5.5% for the whole year. The large year on year increase is due to the advance of preliminary tax payment date. However, it should be noted that the months of May, June and November all have much higher corporation tax targets than the cumulative amount collected in the first three months of 2003. The amounts collected in these months will influence 2003 prospects much more than will the amount collected in the first quarter.

Public spending to end March was within profile. The revised Estimates for public services published last February provided that net voted spending on services will be €30.8 billion or 6.7% more than provided in 2002. Year on year expenditure to end March is 11.8% higher than the first quarter of 2002. Net voted spending on services to end March was €6.83 billion, 22.2% of the 2003 Estimate. That is €440 million below the profile for spending by Departments and offices to end March. However, this divergence is explained by timing factors.

As I said in my press statement of 2 April, there are some spending pressures emerging but it is up to each Department to manage within their 2003 allocations. Overall, the first quarter results do not raise a question about the achievement of the 2003 budget target.