Tax revenues in February, at €2.04 billion, were 8.4 per cent lower on the same month last year, according to the Department of Finance.

Tax revenues over the first two months of 2013 were down €77 million (or 1.3 per cent) on the same period in 2012.

Some volatility was recorded in stamp duty, corporation tax and capital acquisition taxes, but the two largest sources of revenue – income tax and value added tax – were largely unchanged on the January-February period of last year.

Despite the weak headline receipts, the department said its overall budget targets were being met.

The apparent weakness in year-on-year receipts, it said, was down mostly to one-off factors.

The out-turns so far are in line with projections for 2013 set out in December’s budget, the department added.

For the months of January and February 2013 combined, the exchequer deficit was €936 million, broadly in line with the same period in 2012 when one-off factors are excluded. The broad stability in the deficit was the result of exchequer spending falling in the first two months of the year when compared to the same period in 2012.

Spending reductions

Expenditure for end-February 2013 stood at €7.29 billion. This represents a year-on-year decrease of €206 million (2.8 per cent).

Both current and capital spending reductions accounted for the decline, each contributing almost equally.

By department, the biggest spenders registered lower outlays, with the largest decline – of 5 per cent – recorded by the Department of Social Protection.

Exchequer borrowing increased by €25.8 billion during February 2013.

“This is almost exclusively due to €25 billion of bonds issued to the Central Bank to replace the promissory note,” the department said.

“While impacting exchequer debt substantially, this has no impact on General Government Debt.”

The former measure is a cash-basis method of accounting, while the latter is accruals-based and the one watched by financial markets.

The replacement of the promissory notes used to repay bank creditors with new government bonds had no impact on the stock of outstanding public debt.

Exchequer debt servicing costs, at €883 million to end-February 2013, were fractionally lower than the corresponding period last year.

This marginal year-on-year decline “primarily reflects timing factors”.