Ireland's finance department had expected to miss its tax goal for 2012 by 0.6 percent after weak figures in November, the busiest month of the tax year, threatened to wipe out a robust performance in the first half of the year.
However the tax take unexpectedly finished last year 0.7 percent ahead of target, handing the bailed out country a greater than expected head start on beating its deficit target for the third year in a row in 2013.
"On budget day we said that it (the deficit) would come in at 8.2 percent and it's now going to comfortably beat 8, and I would think 7.9 or 7.8 even is realistic for the end of the year," Michael Noonan told reporters.
The deficit is still among the highest in Europe and the government unveiled its sixth austerity budget in little over four years last month, piling 3.5 billion euros of tax hikes and spending cuts on a long-suffering public.
The government will be buoyed by December's tax figures however which saw a big monthly surge in corporation tax with almost twice as much revenue collected than had been forecast, while sales tax revenues also came in ahead of target for the year as a whole.
Income tax receipts finished the year 0.8 percent behind target but that too was better than a month earlier when its deficit was twice as large.
Government overspending continued into December, although it also fell a touch from November with the under pressure health department cutting its surplus to 270 million euros from 321 million euros a month earlier.
The budget deficit for last year fell to 14.9 billion euros from 24.9 billion a year earlier, mainly due to the state recapitalisations of lenders in 2011 and the rescheduling of other bank-related payments in 2012.
"Although the out-turn for last year was better than expected the reality is that the figures are yesterday's news with the main focus now on what happens in 2013," said Alan McQuaid, economist at Merrion Stockbrokers.
"Following last month's sixth austerity budget since October 2008 Ireland is aiming at a deficit of 7.5 percent of GDP this year. The official strategy of under-promising and over-delivering is set to be repeated again in 2013."
A deal to ease the terms on Ireland's so-called "promissory notes", IOUs the state pumped into two failed lenders, would also help reduce the deficit this year by over a percentage point, according to finance department estimates.
Noonan said Ireland has made reasonable progress with the European Central Bank (ECB) on the promissory note talks but cautioned that key issues remain outstanding.
Center>Copyright Reuters, 2013