Corporate tax revenue represents €1 out of €4 collected, the highest share ever recorded

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According to a new corporate tax analysis, around €1 out of €4 of all taxes collected are corporate tax payments, the highest share on record.

The document released by the Department of Finance on Thursday indicates that corporate tax revenue in Ireland has more than doubled in five years, raising legitimate questions about the sustainability of this source of revenue.

He said reliance on potentially volatile sources of revenue to finance permanent increases in government spending is not sustainable for public finances.

The analysis suggests that potential revenue from corporate tax at risk last year could be between €4 billion and €6 billion.

He said there is reason to treat some of the corporate tax revenue as volatile going forward. To reduce the risks for public finances in this way, it could be a matter of replenishing the Rainy Day Fund or creating a fund intended to finance an aging population.

Finance Minister Paschal Donohoe said: “The analysis released today by my department highlights the risks associated with the recent upward trend in corporate tax revenue.

“Around €1 out of €4 of all taxes collected comes from the payment of corporation tax – an exceptionally high figure in historical and cross-border terms.

“In other words, only ten major corporate tax payers account for €1 out of €8 collected.

“The key message from today’s release is that a reliance on volatile sources of revenue to finance permanent increases in government spending is a potential blind spot for public finances.

“In my view, there is a strong case for treating some of the corporate tax revenue as volatile in nature. By doing so, we can face a major risk for public finances and thus contribute to ensuring the fiscal sustainability of our country.

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