Written answers

Wednesday, 18 February 2009

8:00 pm

Photo of Damien EnglishDamien English (Meath West, Fine Gael)
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Question 48: To ask the Minister for Finance if he has confidence in the basis of the forecast of tax receipts in 2009; and if he will make a statement on the matter. [6242/09]

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Question 60: To ask the Minister for Finance his views on the January 2009 Exchequer returns and their significance in forecasting tax revenues for the remainder of 2009; the forecast tax revenue for 2009; the forecast expenditure for 2009; the forecast general Government deficit for 2009; and if he will make a statement on the matter. [6355/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 48 and 60 together.

In the recent Addendum to the Irish Stability Programme Update, aggregate tax forecasts for 2009 and the following years were set out. Reflecting the weak economic climate that exists, my Department now expects tax revenue for 2009 of about €37 billion. This represents a 91⁄4 per cent decline in revenue, which would be the second year that taxes have contracted.

The Addendum also forecast Gross Voted expenditure for 2009 of €56.5 billion. On the basis of this forecast the Government last week decided on a package of savings measures to raise €2 billion in a full year basis. The precise details of individual Vote allocations are currently being finalised in consultation with Departments and will be included in the upcoming Revised Estimates Volume 2009, to be published in mid-March. A General Government deficit of approximately 91⁄2 per cent of GDP is forecast for 2009.

The end-January Exchequer Returns showed an Exchequer deficit of just over €747 million and tax receipts, at €3,735 million, down 19% year-on-year. However, it must be taken into account that tax revenue in January 2008 was relatively strong. In this regard, tax receipts for January 2009 represent approximately 10% of the forecast receipts for the year and this is in line with the percentage received in previous years. In addition, the Budget 2009 changes to Income tax (the introduction of the 1% income levy) and VAT (the increase on the standard rate to 21.5%) are not, due to the normal lags in the collection times, fully reflected in these figures. Consequently, the January 2009 figures are generally in line with expectations.

My Department will publish monthly profiles of expected tax revenue receipts by the end of this month. However, it is still too early in the year to draw any firm conclusions regarding the end-year outturn. As is the norm, my Department will closely monitor incoming receipts and I will keep the Government informed of any emerging trends.

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