Ireland’s corporate tax revenues may be “extremely volatile” with just 10 companies paying half of the more than €15 billion generated annually by the levy, Finance Minister Paschal Donohoe will warn Cabinet today.
In a significant move, Mr Donohoe will today tell ministers that so much revenue at current levels cannot be guaranteed going forward as he seeks to dampen demands from colleagues ahead of the September 27 budget announcement.
Mr Donohoe will deliver a report from Treasury officials that reportedly estimates that up to €6 billion of current corporate tax revenue could be “excess” or higher than what would be expected based on economic fundamentals.
“Identifying this surplus will enable the Government not to base spending on unreliable revenues while ensuring Ireland remains a prime destination for foreign direct investment,” Mr Donohoe’s spokesman said last night.
A significant portion of our tax revenue – €1 for every €8 based on 2021 figures – depends on the business decisions of 10 large companies, which pay more than half of corporate tax revenue, which totaled €15.3 billion last year. The Treasury officials’ report will show that much of the recovery in our public finances has been driven by continued growth in corporate tax revenues.
Whilst she will argue that this is positive and reflects well on Ireland as an attractive location for highly profitable multinationals, she will also warn that the buoyant corporate tax receipts of recent years may be temporary and therefore do not provide a solid basis for building permanent spending commitments.
Mr Donohoe’s spokesman added: “This is a medium-term risk that we can manage if we make the right decisions in the period ahead.”
Meanwhile, Public Expenditure Secretary Michael McGrath will today ask ministers to sign off on the Public Works Office which is proceeding with a tender for permanent modernization work on Brexit infrastructure at Rosslare Europort.
The estimated cost is over 200 million euros, but the government hopes to proceed with the project as soon as possible to access funds from the EU’s Brexit Adaptation Reserve (BAR).
To be eligible for BAR funding, the project must be completed by the end of December 2023.
The government considers it a critical infrastructure project to ensure compliance with EU customs, health and food control regulations. Authorities involved in the inspections taking place at Rosslare are the Inland Revenue, Department of Agriculture, Food and Marine, Department of Health and the HSE.
Ahead of the budget later this month, the government was urged to put in place a Covid-style payment support scheme for businesses and workers to help ease the impact of the energy crisis.
Socialists yesterday called for a new ‘Energy Crisis Support Scheme’ (ECSS) that would provide graduated support to workers and financial support to companies.
“We’re talking about this type of intervention that brings money to people and businesses as quickly as possible,” said party co-leader Róisín Shortall at the party’s think-in in Dublin.
She said the types of government payment models used during the Covid-19 pandemic should be used to receive cash payments to workers through their employers’ existing payroll system, with the IRS then paying the companies within a week or two reimbursed.
The party is calling for an increase in the fuel allowance of €15 per week for existing recipients and an extension of entitlement to the payment to current recipients of working family allowances.
https://www.independent.ie/business/budget/our-bumper-corporation-tax-take-cannot-be-guaranteed-forever-paschal-donohoe-warns-cabinet-41967413.html Our high corporate tax revenue cannot be guaranteed forever, Paschal Donohoe warns the cabinet