Fianna Fáil Spokesperson on Finance Michael McGrath has welcomed the commitment from Minister for Finance Paschal Donohoe this morning to review the sustainability of Ireland’s corporation tax receipts.
Minister Donohoe gave the commitment in response to a parliamentary question from Deputy McGrath during Finance Oral Questions in the Dáil.
Deputy McGrath commented, “In 2017, the Coffey Report into Ireland’s Corporation Tax Code concluded that ‘the level-shift increase in corporation tax receipts seen in 2015 can be expected to be sustainable over the medium term to 2020.’ However, this assessment is now out of date and has been overtaken by events, notably by the further dramatic increase in corporation tax receipts since 2015.
“In 2015, we collected €6.9bn in corporation tax (up from €4.6bn in 2014). However, receipts have now jumped a further 50% with a staggering €10.4bn collected in 2018. The 2018 receipts were almost €2bn higher than the Department of Finance forecast at the start of the year and represented an increase of 27% over 2017 receipts.
“It is clear that corporation tax receipts are booming. While this is obviously good news for the exchequer, it also now represents a key risk for the public finances. Statistics from the Revenue show a high level of dependence on the multinational sector for these receipts and, within that heading, on a very small number of companies.
“Making permanent expenditure commitments on the back of receipts that may prove to be temporary is a risk we need to avoid, given all of the other uncertainties facing the economy. Minister Donohoe has agreed with our request that the sustainability of Ireland’s corporation tax receipts be reviewed. Fianna Fáil will work with the Minister and his officials on advancing this important piece of work.”