The surprise, I must say, is all my, at least on the tax take side. Things have improved... dramatically... by what I would described as a 'nil change'. In other words, there is no improvement on the tax side.
Total tax take is now moving deeper down relative to 2009 and is nowhere near 'turning around'. It is not even stabilizing on the downward trajectory. Year-on-year total tax take is down 9%. End of July the same figure was 8.2%. Oops...Income tax and Vat two mega tax heads:
The two are 8.2% and 6.4% behind January-August figures for 2009. A slight improvement on the gap in 7 months to July (8.4% and 6.9% respectively), but not that much of an improvement.Corporate and excise taxes:
Corporate tax take is now on a trend of erasing the surplus on 2008 accumulated since June. This is bad, folks. In 7 months to July 2010, corporate tax receipts were 13.8% behind 2009 figure. In 8 months to August 2010 these are a massive 24.1% behind. As far as excise tax goes - receipts in 7 months to July 2010 were -3.3% behind corresponding period for 2009, by August 2010 8-months cumulative receipts gap to 2009 period shrunk to 2.7%. Good weather and more partying at home (instead of taking vacations) means booze is being consumed, while euro weakness relative to 2009 means we are buying more of it at home instead of N Ireland.Next the 'Celtic Tiger Taxes', aka Stamps:
No sign of a serious improvement on abysmal 2009 here either. Poor showing continues with receipts down 18.2% on 2009 in seven months to July and down 11.1% on the first 8 months of the year in August. Let's see what happens in the big boost month of September.Capital gains:
CGT was down on 2009 in the first 7 months of the year by 44.1% and down on the first 8 months of the year by 42.6%. Marginal gain in relative performance is clearly not enough to bring us even close to the extremely poor performance of 2009.Summarizing year on year changes in all tax heads:
And to entertain our 'official analysts' favorite pass time: performance relative to targets
One noticeable and real change in monthly returns is the share of the burden that befalls our ordinary incomes:
Table below summarizes:
Nothing really to add to this except this: Minister Lenihan clearly thinks we are seeing improvements on the fiscal side. I see continuously increasing burden of Minister Lenihan's deficits on the ordinary taxpayers and consumers. In my economics books, this is bound to add pressure on Irish growth. Severe pressure.
Speaking as an ex-investigator in Revenue, the tax take will continue to fall away. This is the passive revolution. Ireland has no effective tax collection system. It is wholly based upon fear. The realith of bankruptcy however is a more genuine motivator and faced with apotential penalty and tax paid or definite bank/creditor action, most taxpayers opt for turning the state into a lender of last resort!
ReplyDeleteThink about it! VAT receipts for those who know what is going to happen, should drop to zero as they decide to take advantage before leaving the country for the Statute of Limitations period to pass. 10 years for prosecution.
Did you know I was the first to get a prosecution for tax evasion in Ireland? VAT!
This is the Budget time profile. Then they issued a new profile in Feb or March and the outturn is quite close to that in fairness.
ReplyDeletehttp://www.budget.gov.ie/Budgets/2010/Documents/Final%20SPU.pdf
But your figures look atrocious compared to this profile from the 17th of December 2009 .
Constantin, thanks for the excellent analysis regarding the tax receipts yield.
ReplyDeleteIt is obvious that if "we have turned the corner" as our goverment keeps telling us, that a pickup in economic activity such as an increase in employment for examle, would lead to
an increased tax yield for PAYE.