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Exchequer Returns May 2018 - Peter Vale commentary

Peter Vale Peter Vale

The figures for May were another mixed bag, with good numbers interspersed with some slightly concerning returns.

Of most concern is that the VAT figures for the month were 3.4% behind target, evidence of weaker than expected consumer spending. Figures for the year to date, while ahead of last year, are 1.5% adrift off target. 

Income tax figures for the month were on target, although it's surprising that income tax receipts haven't overshot forecast given the strong labour market. The Department has previously blamed lower than expected returns from the self-employed as the reason for this.

Corporate tax receipts came in strongly in May, with the Department flagging the impact of IFRS 15 accounting changes as the main reason.

Capital receipts growth remains modest despite the increase in asset values in recent years. Capital tax rates remain relatively high and we've speculated before whether this is preventing the transfer of assets/wealth, thereby stifling economic activity.

So overall a mixed bag of figures, with strong corporate tax numbers helping to keep figures for the year to date on track.