Tax revenues came in ahead of schedule in January, providing further evidence that the economy is recovering, according to the January Exchequer figures.
Total tax receipts last month were €3.167 billion, 12.7 per cent ahead of the same month last year. This was ahead of the 10.3 per cent rise scheduled in the expected profile of tax revenues for the year drawn up by the Revenue Commissioners and published recently.
Spending in January was €2,565 million, €90 million below expectations.
Tax revenues tend to be volatile from month to month and Department of Finance sources warned against reading too much into one month's figures.
However, after a weak start to 2003, the trends look more promising in early 2004. Most tax headings came in close to or slightly ahead of target. Government officials will be content that the main tax headings of income tax, corporation tax and VAT all came in almost exactly on target for the month.
Reflecting the continued strength of the housing market, stamp duty remained strong, with €156 million collected in January, compared with a target of €140 million and €130 million in the same month last year.
The only noticeable area of weakness is excise duties, one area which fell well short last year due to a drop in sales of alcohol and tobacco. In January, €349 million was collected under this heading, compared with expectations of €375 million. The January returns also include €80 million in revenue not yet allocated to any tax heading.
Looking at spending, the figures show that voted expenditure in January at €2,565 million was fractionally below the €2,587 million in the same month last year. Investment spending at €254 million in January was a bit below the expected €296 million.
The remainder of the shortfall related to day-to-day spending, but can not be judged to be significant so early in the year. The Minister for Finance, Mr McCreevy has pledged to keep spending on target for the year, as occurred in 2003.
Davy stockbrokers, in a comment on the figures, said that while it was too early to judge the likely outcome for the year, January was "an encouraging start". The overall Exchequer surplus for the month was €484 million, compared with €284 million in the same month last year.
The latest Exchequer figures are the latest in a line of indicators suggesting some recovery in economic conditions. Consumer and business sentiment indicators have shown improvement and economic analysts hope that exports and investments will pick up as the year goes on, encouraged by the improving international environment.
