Ireland has consistently beaten its revenue target in recent years, even as it gradually unwinds tax increases introduced during the financial crisis due to a rapid jobs recovery and the benefits of being a major location for multinational companies.
However while corporate tax receipts were 6.3 percent ahead of target at the end of the third quarter, income tax and value-added tax, the two largest tax categories, stood 0.1 percent and 0.3 percent below target. A large 8.0 percent underperformance in excise duty more than wiped out the company tax gains.
The total tax take, however, was still 5.2 percent up year-on-year, the data from the finance department showed on Tuesday, reflecting Ireland’s strongly performing economy.
Assuming fiscal targets are met, Irish Finance Minister Paschal Donohoe has a modest 800 million euros to dish out on further tax cuts and spending increases next year, having already committed over 2 billion through previously announced increases in current and capital spending.
Donohoe is expected to find extra money through measures under consideration including the scrapping or part scrapping of a reduced VAT rate for the tourism sector.
With expenditure 0.1 percent behind where the government had estimated it to be and up 8.9 percent year-on-year, the exchequer recorded a deficit of 1.47 billion euros for the first nine months of the year.
The government expects to run a deficit of 0.2 percent of economic output this year, although the central bank and independent fiscal watchdog has urged it to be more prudent and target a surplus.