Updated at 6.51pm
THE GOVERNMENT TOOK in more than expected in every form of tax last year – except for local property tax.
Exchequer returns for the full 2014 year showed the government’s deficit narrowed to €8.2 billion – €3.3 billion less than the previous year.
But the latest figures, out this afternoon, revealed the cost of servicing the nation’s debt was up €153 million on 2013 with the total interest bill hitting nearly €7.5 billion for the year just finished.
Other non-voted spending included the government’s €461 million capital contribution to Irish Water.
Last year’s total tax take was up €3.5 billion, or 9.2%, on 2013 – and some €1.24 billion ahead of what was expected in the Budget forecast for the period.
Income taxes were the biggest contributor and they were up €1.4 billion on last year due to the increase in the number of people at work.
Output growth figures for Ireland – now the fastest-expanding economy in the EU – have significantly outstripped 2013 forecasts and the unemployment rate has come down quicker than expected as the recovery has taken hold.
Value-Added Tax (VAT) and excise duty were both significantly ahead of initial estimates, which the government put down to a big rise in domestic spending and demand.
Only the local property tax brought in less than expected – €491 million in total, or over 10% less than forecast.
Here’s what made up the government’s €41.3 billion in tax revenues last year:
And the spending
On the spending side, voted expenditure was €54 billion for the full year. That was about €1 billion over the government’s forecast, but down €507 million on the total 2013 bill.
Health costs made up the bulk of the overspend – some €581 million, or 4.4%, ahead of expectations.
This is where all that tax money went:
Finance Minister Michael Noonan told RTÉ’s Six One News that the good exchequer figures would ”repair a lot of the damage that was done when the country became insolvent”.
He said the government could now afford to give more money to essential services like health, education and justice.
We can reduce personal taxes and we can continue to aim for a balanced budget, and we’re well on the road now.”
Taoiseach Enda Kenny earlier said he wanted a quarter of the workforce to be exempt from USC payments with changes in the next budget.
2015 a ‘watershed year’
Chambers Ireland chief executive Ian Talbot said this would be a “watershed year” for Ireland’s economic recovery and the country had to build on the strong performance from 2014.
“However risks remain, many outside our control such as ongoing international developments,” he said.
“Therefore government must not lose focus and needs to continue to commit to the prioritisation of job creation and cost containment in the economy as the key drivers of competitiveness.”
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