Tax receipts to the end of September published by the Dept of Finance don't augur well for the outcome for the year. The target for 2009 tax receipts set in the April supplementary budget of €34.4bn will not be met.

Leading the shortfall against target are VAT receipts and Income Tax receipts, which between them are €1bn less than they need to be, year to date. There is a real risk that the situation for both these taxes will be considerably worse by year end. Some 20% of income tax receipts (in normal years) are accounted for by the self employed, and we won't know how these will turn out until the end of November. VAT, being a consumer tax, tends to jump in the last two months of the year largely because of Christmas consumer demand. Few of us would bet on the yields from either tax surpassing expectations by year end.

Relative to the other taxes, the CT yield appears quite firm, even allowing for the additional contribution arising from earlier instalment payments of CT. As it happens, the audited Finance Accounts from 2008 were published a day after the September Exchequer statements. They show the tax downturn in the starkest possible way – Income Tax down from €13.6bn in 2007 to €13.2bn in 2008 and now a projected target, unlikely to be met in 2009, of €12.5bn. Comparably, VAT has reduced from €14.5bn to €13.5bn to €11.4bn.