A €60m shortfall from expectations
The Department of Finance has revealed that income tax takings for March fell short of the target set in Budget 2017.
Over €1.29 billion was brought in last month, some €57 million below the target.
Looking at the first three months of the year, the €4.41bn take missed the department's target by €180m.
Three of the four major tax categories are behind target for the current year so far. Most of these can be explained.
For example, corporation tax is down 25% as there hasn’t been a big corporation tax collection month thus far in 2017 and the situation could correct itself with a few large company payments.
Excise is also down, but this has been subject to distortion due to the actions of tobacco manufacturers ahead of the change to cigarette packaging.
VAT, meanwhile, has strongly recovered from last year’s anaemic performance and is 3.4% ahead of target.
However, income tax is nearly 4% lower than expected.
Most strikingly, the Universal Social Charge (USC), was roughly €60m (or 7.5%) below target.
The department is unable to explain why these receipts haven't shown up. It is now set to talk to the Revenue Commissioners as an investigation is launched into the reasons behind this unexpected drop, particularly because USC should, as with PAYE, record increases that mirror sharp rises in employment.
CSO figures released yesterday confirmed that unemployment fell to 6.4% last month, with the jobless rate now down from the 8.3% it stood at a year ago.
The latest department figures also showed that the deficit between government spending and receipts continues to fall – down €266m to €900m compared to last year’s first quarter.