tag:blogger.com,1999:blog-2826531655042170344.post3027703616289133519..comments2024-03-26T11:29:52.986+00:00Comments on Economic Incentives: Mid-Year Exchequer ReturnsSeamushttp://www.blogger.com/profile/15679299530222667673noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-2826531655042170344.post-25472658931162807072012-07-05T16:05:06.506+01:002012-07-05T16:05:06.506+01:00The DoF have provided figures for the two complica...The DoF have provided figures for the two complications in the Exchequer figures.<br /><br />1. There was €251 million that should have been paid into the Exchequer Account in 2011 but was delayed until January 2012.<br /><br />2. There was €209 million of revenue that was provisionally classified as PRSI reclassified as Income Tax following an analysis during the first quarter.<br /><br />#2 has no effect as the net effect of lower PRSI and higher Income Tax is zero. #1 makes the cash-based Exchequer Account look better in 2012 but has no impact on the general government balance (staying within the EU's 8.6% of GDP deficit limit) as the GGB is calculated on an accrual basis. <br /><br />The IMF set their targets in terms of the primary exchequer balance so both #1 and #2 impact that but there is a 'revenue adjuster in the <a href="http://www.finance.gov.ie/viewdoc.asp?DocID=7304" rel="nofollow">Information Note </a> that can pick up issues such as these.Seamushttps://www.blogger.com/profile/15679299530222667673noreply@blogger.comtag:blogger.com,1999:blog-2826531655042170344.post-35728992777041444142012-07-05T15:47:21.566+01:002012-07-05T15:47:21.566+01:00Thanks Rob S,
I accept that there as issues such ...Thanks Rob S,<br /><br />I accept that there as issues such as the one you describe. I'd like to figure out the size of these.<br /><br />From Seamus' analysis: "The budget had a 2012 forecast of €35,825 million (up on the €34,027 million collected in 2011). Because of the corporation tax and PRSI issues this was revised up to €36,375 million."<br /><br />From this I infer that the combined impact of corporation tax and PRSI issues is €36,375m minus €35,825. Assuming the corporate tax issue is not negative, the max of the PRSI issue is 550m. This would still leave a s.500m y-on-y increase. And I'm wondering where this comes from.<br /><br />(I do note that I'm using PRSI whereas you mention USC. Are you taking about a completely separate item that isn't addressed by Seamus?)Ahura Mnoreply@blogger.comtag:blogger.com,1999:blog-2826531655042170344.post-90918896232776580552012-07-05T15:26:29.477+01:002012-07-05T15:26:29.477+01:00@Rob,
The tax may become effective on Jan 1st but...@Rob,<br /><br />The tax may become effective on Jan 1st but that does not mean everyone will actually be paying it. Obviously for PAYE taxpayers they will start paying at the new rate but other earners will only be pay at the new rate when they make their tax return. If a tax is introduced on the 1st of Jan 2011, people will have until the November 2012 to make their tax return and pay at the new rate.Seamushttps://www.blogger.com/profile/15679299530222667673noreply@blogger.comtag:blogger.com,1999:blog-2826531655042170344.post-25756892532211911502012-07-05T14:45:52.833+01:002012-07-05T14:45:52.833+01:00Ahura
I believe the majority of that is down to t...Ahura<br /><br />I believe the majority of that is down to the USC (the DoF have mentioned this previously if they did not in this month's figures).<br /><br />When a new tax is introduced (for reasons I don't quite fully understand) it never raises the full amount of revenue in its first year.<br /><br />In this case the amount of revenue raised by the USC in 2011 was X but for every "Full Year" (as the department put it) after 2012 it will raise X+1.<br /><br />It never made full sense to me because taxes take effect on January 1st (3 or so weeks after announced in the budget) so why the shortfall in its first year of implementation?Rob Snoreply@blogger.comtag:blogger.com,1999:blog-2826531655042170344.post-4957804840104349352012-07-05T11:46:58.375+01:002012-07-05T11:46:58.375+01:00Hi Seamus,
Thanks for pointing out some of the de...Hi Seamus,<br /><br />Thanks for pointing out some of the details behind what appears to be a good set of tax returns.<br /><br />I don't like reclassifications in times of stress. It suggests misdirection.<br /><br />Income Tax year-on-year is curious. H1 2011 was 6,038m and 7,061 in H1 2012. A whooping 17% increase. Now I know tax rates didn't change in the last budget and that the number of full-time employed has been decreasing over the period. So, all other things being equal, I'd expect a lower amount of income tax; certainly not a 17% increase. Though, as you point out, not all things are equal and there has been some reclassification. However the scale of the corporation tax and prsi seems to be c550m. So any idea why income tax is doing so well?Ahura Mnoreply@blogger.com