Jan 05 FYI... The great tax grab leaves you €1,400 worse off ...interesting

400 a head last year as the Government sought to shore up the public finances, WORKERS were hit with a massive tax grab of €1

WORKERS were hit with a massive tax grab of €1, 400 a head last year as the Government sought to shore up the public finances

As the universal social charge took more money out of taxpayers' pockets, 6bn. Income tax returns went up by a whopping 22pc, or €2

Despite government claims that there has been no hike in income tax rates, changes to tax bands and credits and the introduction of the social charge have all taken their toll on pay packets

But the total tax take was still 2. 5pc below target as the recovery of the public finances continued to stagnate, according to the Exchequer Returns for 2011

The economy is still stalling because of rising unemployment, less consumer spending, the eurozone crisis, and the international downturn, more austerity measures

The figures last night showed that the position at the end of the year was about €600m off target

As this deficit had been expected and planned for by the Government in the run-up to last month's Budget, However, the shortfall will not immediately impact on policy

It even led to some degree of optimism about the management of the public finances going into 2012

Chief economist at KBC Bank, said that "at a time when there have been major overruns in a range of other euro area countries" the final figure could be taken as a positive, Austin Hughes

He also said the receipts highlighted the "robustness and credibility" of the Government's 2012 revenue forecasts. Finance Minister Michael Noonan welcomed the increase in tax revenues

The late windfall came as wealthy people paid off their tax bill on sales of shares and property transactions. The Government actually got a boost from an unexpected €100m at the end of the year

They rushed to do this ahead of an expected hike in capital gains tax in December's Budget

Which turned out to be a pleasant surprise, the Government did not anticipate these extra receipts, Even a month ago

All told, tax revenues went up by €2. 25bn this year

436 more in tax in 2011, 8 million people in the labour force each paid an average of €1. The increased income tax take means the 1

Some paid more than others as the universal social charge is linked to income

000 would have paid about €1, 300 extra in income tax, a regular married couple with a single income of €50, For example

The boost from income tax including the social charge helped total tax revenues to grow in 2011 for the first time in three years. The increase to a total of €34bn was a 7. 2pc rise on the previous year

But the increase in income tax had a knock-on effect on consumer spending, with a shortfall of almost €500m in predicted VAT returns

7bn, representing a drop of 3. The VAT take during 2011 was €9. 1bn. Which was €10, 6pc on the previous year's VAT take

The total tax figure was officially €875m lower than the Department of Finance forecast a year ago

But some €261m worth of corporation tax collected in 2011 was lodged too late to be counted in the official figures for the year

The money only came into the Exchequer yesterday, so will have to be counted officially in January's figures, Because of the banks being closed for so many days over the Christmas period

There was a shortfall of €612m in tax for the year as a whole, Once this missing €261m is added into the equation

- Brendan Keenan and Fionnan Sheahan

Irish Independent