1st Quarter Exchequer Returns show slowing economy

The first quarter returns of the exchequer are indicating towards a siginifcant slow down in the economy all of the main tax heads are below expectations with the exception of Corporation Tax. The biggest shortfall is in Capital Gains Tax which is 10% below profile. Income Tax is 2% below expectations. Even the much vaunted consumer boom may be easing off as Excise and VAT are also below expectations.

The fact that they are below expectations is not the issue. What is at issue is that there has been a deterioration throughout the first 3 months. In previous years departmental profiling, which always takes a conservative approach, has underestimated revenue by as much as 10%. Now even the departments conservative estimates are overshooting actual revenue.

This is another indicator as to the slowing economy, particularly with Income Tax below even the departments conservative estimates as Income Tax is the most predictable of the tax heads.

[kerrynorth]

Sorry, forgot to log in. I posted the above thread.

[cilldara]

this is yet another example of how the ecomony is slowing down. why on earth is nearly every party offering big tax cuts etc. if they get into government. public services such as health etc are bad enough as it is. can anyone tell me how the parties plan to pay for all these new promises such as more gardaí etc. when tax income is falling and they're planning to cut tax. is any party at all offering a bit of sense

how did you manage to open a thread and post to it, without logging in ?

this is yet another example of how the ecomony is slowing down. why on earth is nearly every party offering big tax cuts etc. if they get into government. public services such as health etc are bad enough as it is. can anyone tell me how the parties plan to pay for all these new promises such as more gardaí etc. when tax income is falling and they're planning to cut tax. is any party at all offering a bit of sense

Sinn Féin....

The only party that have not said that they will cut the lower rate of income tax by 2%.

Why?

Because according to the Labour Party's figures, the 2% cut will cost just over 1 billion in tax revenues per annum, and Sinn Féin would prefer to offer €1 billion extra in public services.

But hey, we're economic lunatics.

[NeilW]

Income Tax is 2% below expectations.

Didn't you report earlier in the year that income tax for January 07 was 10% or 12% below departmental estimates? So recovering to 2% down is quite good really. And indicative of the monthly profile of these estimates being out much more than the overall level.

The fact that they are below expectations is not the issue. What is at issue is that there has been a deterioration throughout the first 3 months. In previous years departmental profiling, which always takes a conservative approach, has underestimated revenue by as much as 10%. Now even the departments conservative estimates are overshooting actual revenue.

How does this measure with the January 07 reported shortfall of 10%+ and the 2% for the quarter indicated here?! Those facts and this statement are inconsistent (for income tax anyway). Also I doubt any statistician takes a deliberately conservative approach (indeed in the UK they are always accused of being over-optimistic) - most are in the business of making best estimates.

This is another indicator as to the slowing economy, particularly with Income Tax below even the departments conservative estimates as Income Tax is the most predictable of the tax heads.

Income tax coming in below forecasts is NOT an indicator of a slowing economy.