Michael McGrath (Cork South Central, Fianna Fail)
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90. To ask the Minister for Finance the reason for the shortfall in income tax compared with target as outlined in the November 2017 fiscal monitor; if he will provide an outturn versus target breakdown of income tax, by PAYE, self-assessment income tax, universal social charge and other classifications of income tax in 2017; and if he will make a statement on the matter. [53749/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The positionis that at end-November 2017, cumulative income tax receipts of €18,283 million were marginally down 1.4 per cent or €251 million against profile.This represents strong annual growth of 4.2 per cent or €738 million. Furthermore, it is also worth pointing out that there were significant one-off income tax payments in the comparable period last year, amounting to c. €300 million.  Excluding, these the underlying income tax position is showing a year-on-year increase of 6.0 per cent or €1.0 billion. 

The shortfall against target is across a range of income tax components. It is important to point out that the key income tax component, i.e. PAYE income tax, which accounts for around 65 per cent or €13.1 billion of total income tax receipts is broadly in-line with target at end-November, down just €34 million or just under 0.3 per cent.  This represents robust year-on-year growth of 8.8 per cent or €957 million which reflects solid wage growth and continued strong increases in full time employment.

In relation to USC, overall receipts are on target at end-November.

Of the remaining components of income tax, some relate to unearned income and are not directly impacted by employment or wage developments (e.g. Deposit Interest Retention Tax and Life Assurance Exit Tax).  The majority of these components are below target at end-November, and therefore having a ‘drag’ on overall income tax receipts at end-November 2017.

The other main contributing factor to the overall shortfall is the Schedule D income tax provisional receipts, which are €119 million or 6.6 per cent below target but up 2.3 per cent in year-on-year terms. 

The position is that the final Schedule D returns in respect of 2016 incomes were only due to be filed in November this year and Revenue is still in the process of reviewing these.

Schedule D income earners were also required to pay preliminary tax in respect of 2017 in October/November this year.  However, the associated final returns are not required to be filed until October/November 2018.  It will only be then that Revenue can fully advise why receipts from this cohort of income earners was below expectations. 

The table provides a breakdown of the various income tax components on a Revenue net receipts basis at end-November against provisional collection targets.  It is important to point out that the “Revenue net receipts” reported by the Revenue Commissioners represent matured tax liabilities and this reporting arrangement is more of an accounting concept. As a result, tax receipts reported on an Exchequer cash basis can differ from Revenue’s “net receipts” at any given time for accounting and timing reasons.