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Dublin: 13 °C Tuesday 2 September, 2014

New social charge helps push income tax earnings up by a quarter

Exchequer figures show we’re collectively paying 25 per cent more in income tax since last year.

Image: Images_of_Money via Flickr

THE GOVERNMENT’S RECEIPTS from income tax have risen by more than 25 per cent since last year – primarily due to the new Universal Social Charge introduced in January.

However, Ireland’s total Exchequer deficit rocketed by €7.3billion, or more than 50 per cent, since this time in 2010. This is largely down to payments of more than €10billion made to Irish banks. Between January and September, a total of €3.1billion was spent servicing our national debts.

However, Ireland is on track to meet targets set out in the IMF/EU bailout agreement, which contains a complex mechanism by which such figures are adjusted. The government can exclude payouts to restructure banks from its calculation of these targets.

Finance minister Michael Noonan said when banking payments were excluded, the figures showed Ireland was in a better place than last year. “The Exchequer deficit in the period to end-September is over €3 billion lower than it was in the same period last year, excluding the impact of banking related expenditure,” he said. “This shows that real progress is being made in returning our public finances to a more sustainable position.”

According to the latest Exchequer figures released today, total tax receipts rose by 8.7 per cent year on year to €24.1billion. This was 0.7 per cent above official targets. However, corporation tax receipts fell by 6.1 per cent.

Total government expenditure rose to €47.8billion when both current and capital spending are taken into account. However, spending fell in almost all government departments except for Social Protection (up 12 per cent), Finance (up 4.8 per cent), Jobs (up 7.3 per cent) and Communications, Energy and Natural Resources (up 6.5 per cent).

Minister for Public Expenditure Brendan Howlin said the figures reflected “tight control” of public spending. “It is clear that we are now reducing expenditure, increasing our revenues and aligning the two more closely, as we must continue to do over the coming years,” he said.

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