Noonan: Too Early To Anticipate Tax Performance For 2017

Irish Finance Minister Michael Noonan has said that despite a dip in tax revenues for the first quarter of 2017, “it remains too early to discern any firm trends.”

Noonan made the comment during an appearance before parliament’s Budget Oversight Committee. He said that his Department has increased its GDP forecast for 2017 to 4.3 percent, “reflecting the stronger economic momentum in the second half of last year.” GDP growth of 3.7 percent is expected in 2018.

For the first three months of 2017, tax revenue was down 2.4 percent (EUR282m (USD299.9m)) on target, but up 3.2 percent on the same period in 2016. Income tax receipts were down 3.9 percent on target, and corporation tax receipts came in EUR177m behind target.

Noonan told the committee that “while tax revenues were slightly below expectations, it remains too early to discern any firm trends.” He did nevertheless stress that annual growth has been strong, and that “the performance of VAT has been very encouraging with receipts up over 17 percent or EUR673m in annual terms.”

Noonan noted that robust growth cannot be taken for granted, with the potential fallout from Brexit and the uncertainty associated with the new US administration’s policy direction among the “significant risks on the horizon that could possibly derail the recovery.” He said that “the best way of dealing with these risks is through prudent management of the public finances and competitiveness-oriented policies.”