Leo Varadkar (Dublin West, Fine Gael)
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Question 64: To ask the Tánaiste and Minister for Finance if he has revised his projections for tax receipts and budget deficit; and if he will make a statement on the matter. [13754/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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At Budget time my Department forecast that during 2008 tax revenues would increase by approximately €1.6 billion or 3.5 per cent and that there would be an Exchequer deficit of €4,866 million. Since the early part of this year, some of the international risks identified at Budget time have materialised, specifically in relation to the weaker international economic environment, developments in oil prices and the movements in the dollar and sterling exchange rates.

My Department recently reported on the position as at end of March. In this context of the changed international environment, a good proportion of income tax — up 5% year on year in the first quarter, is a welcome indicator of the resilience of the Irish economy. However, overall tax receipts were €600 million, or 5.1% behind target in the first three months of 2008. Over half of this shortfall is due to the poor performance of Capital Gains Tax which reflects the more adverse conditions in equity and property markets. The next key payment date for CGT is at the end of October. At this stage it is not expected that this tax shortfall, particularly in CGT, will be recouped later in the year. It is important to point out that I believe that the current situation is manageable given the strong position of the public finances such as our low debt to GDP ratio. My Department will continue to closely monitor overall tax performance over the coming months as a clearer trend emerges.