The Government has collected €500m less than forecast in taxes during the first two months 2008, according to the Exchequer Statement for Feburary.

The total tax take came in at €7.5 billion compared with €8.2 billion in the same period in 2007.

The report, published today, revealed a deficit of €124.75m in the two months of the year to the end of February compared to a surplus of €2.2 billion last year.

The shortfall is further evidence of the worrying slowdown in economic activity, especially in the construction and housing markets.

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The amount collected in stamp duty during the first two months of the year was 44% lower than the amount collected during the same period in 2007.

However, the €372m collected is higher than targeted in the December Budget.

The Budget 2008 deficit is just under €4.9 billion for the full year.

Lynsey Clemenger, Economist at Ulster Bank said: "Tax revenue was weaker than expected in February, primarily as a result of shortfalls "The main source of this annual rate of decline – as one would expect – lies with the property related taxes, with Stamps down 40% year-on-year and CGT down 41%," she said.

Here it is interesting to note, however, that in the first two months of the year, Stamps have come in line with profile, indicating that the government has so far sufficiently accounted for weakness in this category at least."

(VB/JM)