Written answers

Wednesday, 8 July 2009

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

Question 168: To ask the Minister for Finance if he has sufficient resources to undertake the necessary research to ensure that budgetary projections are accurately based; and if he will make a statement on the matter. [28587/09]

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

Question 169: To ask the Minister for Finance the degree to which VAT, income tax and stamp duty targets identified in the various budgets over the past 12 months have been realised in the half yearly returns; the areas requiring attention; the action to be taken; and if he will make a statement on the matter. [28588/09]

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

Question 170: To ask the Minister for Finance the degree to which tax returns for the first six months of 2009 are in accordance with budgetary projections; the action taken or expected to be taken to address issues arising therefrom; and if he will make a statement on the matter. [28589/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 168 to 170, inclusive, together.

The Supplementary Budget forecast that total tax revenue for the year would amount to €34.4 billion. Monthly profiles for individual tax-heads were published at the end of April.

The end of June Exchequer Returns showed that €15.8 billion in tax receipts were collected in the first half of 2009. Income Tax receipts were €113 million or 2.0% below target, VAT receipts were €202 million or 3.5% behind profile and Stamp Duty receipts were €40 million or 10.3% down on target. Against this, other taxes, namely Corporation Tax and Excise Duties, were ahead of target. Overall, total taxes were €188 million or 1.2% below profile. While this is very close to target, significant sums remained to be collected in the second half of the year and the performance of Income Tax and VAT receipts in particular, will need to be monitored closely.

Economic and fiscal forecasting, at the best of times, is not an exact science. In the extraordinary circumstances prevailing over the last twelve months, it has proven to be extremely difficult for all forecasters to accurately predict short-term economic trends. In this context, the economic and tax projections were revised during the course of the year. My Department works closely with the Revenue Commissioners on an ongoing basis to ensure the highest quality tax forecasts are delivered to Government.

Last year my Department published a report produced by a group specifically established to examine the tax forecasting methodologies used by the Department. The Tax Forecasting Methodology Review Group comprised of experts from the Department of Finance, the ESRI, the Revenue Commissioners, and the Central Bank and had input from the EU Commission.

In terms of its findings, while the Group suggested that the Department of Finance displays a prudent bias in tax forecasting, it did not suggest any major structural recommendations to the way the Department forecasts tax revenue. However, it did recommend a number of adjustments which the Department is currently implementing. Furthermore, the Group's report also indicated that the Department's methods were not out of line internationally. A copy of the Group's report was laid in the Dáil library and is available on the Department of Finance website at www.finance.gov.ie.

As I have stated many times, I am satisfied that my Department as currently resourced is fully capable of providing the necessary economic analysis and advice to myself and to Government.

Comments

No comments

Log in or join to post a public comment.