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Surge in tax receipts to help balance Republic's finances

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Minister: Paschal Donohoe

Minister: Paschal Donohoe

Minister: Paschal Donohoe

A surge in corporation tax receipts in the Republic may see Finance Minister Paschal Donohoe balance the budget after he came under heavy criticism for out-of-control spending.

That would be the first time since 2007, before the financial crisis hit, that the Ireland has not spent more than it has taken in tax revenues.

Exchequer returns detailing the tax revenues and spending numbers for December are due to be published tomorrow, and if the numbers show a balanced budget it would be a feather in the cap of Mr Donohoe, who pushed back plans to balance the budget until next year.

The last time the Republic balanced its budget was in 2007 and the deficit surged to as much as 32% of gross domestic product in 2010 as the financial crisis unfolded and the bank bailout started, with the government assuming the private lenders' liabilities.

While Mr Donohoe has acknowledged that a surge in receipts may not be sustainable, balancing the budget would help reassure financial markets and could create the fiscal space for reductions in the higher rate of personal tax.

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