May Exchequer Returns

[kerrynorth]

They are due shortly I believe. They will be an important indicator with all the uncertainty around the economy particularly after Credit Suisse's slashing of this years growth forecast by half from 6 to 3% over the weekend. The key tax head to look at, as always, is Income Tax. All the other tax heads could be affected by one thing or another. Corporation Tax which was the only tax head keeping the overall tax take on profile is better reflective of the economy 18-30 months ago and the consumption tax heads will all be afticially inflated from our high inflation rates. Therefore, it is Income Tax that will give you a better idea of the actual performance of the economy.

All the main tax heads bar Corporation Tax were running below profile upto April. This is important as the Dept. of Finance always forecast revenue with a conservative view and if they are running under that profile then the economy is certainly running below what the banks and other financial institutions are suggesting. For example for the past few years when the economy was powering ahead the tax heads were running away above profile.

If the Credit Suisse forecast is to mean anything then it should start showing in the revenue returns particularly with Income Tax.

[rockyracoon]

Is there any accounting lag between tax receipts and reporting periods? Just wondering.

[kerrynorth]

Upto 2 months for Income Tax, as high as 3 months for consumption taxes, upto 6-9 months for some aspects of capital taxes and 18-30 for Corporation Tax. By far and away Income Tax is the best and most reliable indicator as it is also unaffected by inflation and of course the strength/weakness of income growth is itself a good indicatior for the economy. For example the last figures for construction wages I saw were that wages in that sector were growing at only 1.7% annually 1/3rd of the national average, reflecting the downturn in employment prospects in that sector.

[rockyracoon]

Cheers. I'm thinking there won't be any great decrease myself. Working in the construction sector myself (outside Dublin), I haven't seen any great downturn. Things are definitely getting sticky though.

[kerrynorth]

The figures are out. No great change from April other than that the overall Tax revenue figure is now for the first running below profile 18.603billion as opposed to the forecast 18.622billion. Excise duties in particular are running well below profile. On the state of the public finances overall spending appears to be getting out control. The differential with the figures month by month compared to last year show that the public finance deterioration has risen from 1.1 to 1.6billion in just 1 month.

[Sidewinder]

Public spending accelerated by 23% in the first half of the year. Basically the election was bought. Again.

We'll be heavily in deficit by autumn, and there'll be a wide range of large public-spending cutbacks. The housing market will have collapsed, the construction industry will be in freefall with very few new starts happening for the rest of this year, 4 or 5 major FDI companies will announce huge job cuts, ECB rates will be clearly signalled to be heading for 5%, inflation will remain stubbornly way too high despite the collapse in consumer spending, and unemployment will be surging upwards.

Meanwhile, the likes of Austin Hughes and Dan McLaughlin will still be waffling on about soft landings and "minor corrections", and all the clueless party hacks on this forum will still be babbling about "strongest economy in world, everything is fine, nothing to see here".

[Libero]

Public spending accelerated by 23% in the first half of the year.

WTF? You're right and all but why isn't this the lead story on RTÉ news?

And all from a government that campaigned on being not as fiscally flaky as the other lot; Don't Throw It All Away, etc...

[droghedasouth]

The key tax head to look at, as always, is Income Tax...... Corporation Tax which was the only tax head keeping the overall tax take on profile is better reflective of the economy 18-30 months ago and the consumption tax heads will all be afticially inflated from our high inflation rates. Therefore, it is Income Tax that will give you a better idea of the actual performance of the economy.

If the Credit Suisse forecast is to mean anything then it should start showing in the revenue returns particularly with Income Tax.

From http://www.rte.ie/business/2007/0605/exchequer.html

Strong receipts from corporation taxes - which are running €221m above expectations - more than compensated for relatively small shortfalls of €56m in income tax receipts, €120m in excise duties, €79m in capital gains tax receipts, and €28m in VAT.

Receipts from stamp duties are running €16m below target.

How right you were.
The trend is clearly set.
Interesting to see if Cowen continues at Finance or steps aside to Foreign Affairs so as to let say Michael Martin carry the can.

[Sidewinder]

Because RTÉ are politically spineless and will never do anything to attack any of the two big parties. This is what comes of having RTÉ dependent for funding on the TV licence which is increased or not at the whim of the Minister of the day; plus the lingering cultural after-effects within RTÉ of the Reign Of Terror back in the Cruiser/Harris days. All the surviving bigwigs these days were junior staff in the 70s purge/witch-hunt.

[Fr. Hank Tree]

FG and Labour should have put this to Cowen during the campaign FFS. We knew before today that spending at the start of the year was up. The only person to put this to Biffo was Matt cooper.