The Exchequer deficit on a twelve-month rolling basis was just over €12 billion in May, according to figures from the Department of Finance.

Tax receipts in May were 8.2% ahead of expectations at €7.5 million.

VAT receipts were particularly strong, up 12.5% on profile at €2.296 billion.

Income tax was 10% ahead at €2.177 billion.

Cumulatively to the end of May, tax receipts are ahead of target by €800million or 3.5% at €23.7 billion.

Spending is 4.6% or €1.456 billion higher than the same period in 2020 at just under €33 billion but below profile by 4% or €1.382 billion.

Peter Vale, Tax partner at Grant Thornton Ireland said the figures are very positive.

“Income tax receipts remain exceptionally strong. With the economy re-opening and more people returning to work, income tax looks set to comfortably beat both last year and target receipts for 2021,” he said.

“Indeed if the recent trend continues, there could be a circa €1bn surplus in income tax receipts alone by year end,” he added.

Mr Vale said VAT figures for May reflect spending in March and April, when much retail remained closed.

“Despite this, VAT receipts were in line with the May 2019 equivalent figure – pre Covid. This is a remarkable achievement and shows how consumers have adjusted to new ways of spending,” he said.

With non essential retail having now re-opened, Mr Vale said VAT receipts are likely to rise sharply in the second half of the year.

“While consumers will likely remain cautious, with high savings levels, VAT receipts for the year will be significantly ahead of both last year and target, providing another surplus for the Minister,” he said.

He said it is also worth noting that income tax and VAT receipts have remained strong despite many taxpayers choosing to defer tax payments.

“Receipts will increase further once these deferred amounts are paid to the Exchequer, estimated to be over €2bn,” he added.