+34
The Irish Government expects corporation tax receipts to reach €34 billion this year, below its earlier forecast of €35.3 billion. Although the headline rate for some large multinational companies has increased to 15 per cent, delayed payments are expected to reduce current-year revenue. The revision adds uncertainty to the 2027 budget and raises concerns about relying on exceptional corporate tax income to fund recurring public spending.
Easily lost in the bumper corporation tax numbers published with Friday’s exchequer returns was the admission by the Government that the State will not collect as much corporation tax this year as it had expected.
The number will be up for sure – hardly surprising given that the headline rate for some of our largest multinationals has risen to 15 per cent from 12.5 per cent – but it will fail to match Government projections. Back in April, the Department of Finance anticipated corporation tax receipts would come in at €35.3 billion.
As recently as last month, it was reported that figures prepared for Taoiseach Micheál Martin and Tánaiste Simon Harris suggested that number would be exceeded by a wide margin . Now, just weeks later, it has been revised down to €34 billion, fractionally below the fairly conservative estimate in last year’s budget white paper.
Addressing the issue, even as the department unveiled an unexpected €3 billion take from the business tax in September, a spokesman said some payments expected this year would not now arrive until early next year. That is very likely but as Harris and his ministerial colleague Jack Chambers put the finishing touches to the budget package for 2027, the first hint of uncertainty about the outlook on corporation tax suggests the time for playing fast and loose with “windfall” corporation tax revenue is coming to an end.
No one should need the Economic and Social Research Institute think tank or the budgetary watchdogs at the Irish Fiscal Advisory Council to realise that using exceptional tax income to fund recurring day-to-day spending is simply irresponsible, especially in a State just one generation on from a catastrophic international bailout. This time last year, in the budget white paper, the then finance minister Paschal Donohoe saw strong growth in corporate tax underpinning his budgetary arithmetic, alongside income taxes.
Donohoe did add that he expected the tax to top out at some stage. That may be sooner than we think, especially as we are so reliant on a small cohort of companies. Just three companies, Eli Lilly, Apple and Microsoft, account for close to half of all business tax income. A few years ago during the Covid pandemic, Pfizer would have featured in that sentence.
Its subsequent travails illustrate just how fast fortunes can change – and how exposed we might be. As for income tax, that is certainly delivering on Donohoe’s expectation for now, but even there, the employment outlook is clouded by concerns over geopolitical factors and the impact of artificial intelligence. Regardless of political party, the focus of every deputy in the Dáil in advance of budget day is on spending, not sound fiscal practice.
Politically, expectations have been raised; economically, we are mortgaging the future of our younger generations.
Corporation Tax Irish Government Budget 2027 Multinational Companies Public Finances
Ireland Latest News, Ireland Headlines
Similar News: You can also read news stories similar to this one that we have collected from other news sources.
Son of the Serpent: Shauna Lawless on Gael Song, Irish History and MythologyAuthor Shauna Lawless discusses Son of the Serpent, the fifth Gael Song novel, the Anglo-Norman invasion of Ireland and blending Irish history with mythology.
Read more »
David McWilliams: Is the Irish housing market beginning to turn?The current easing is not driven by new supply - buyers have reached the limit of what they can afford and the homes available don’t match what people want
Read more »
Irish-made watches showcased and a 1960s microcar goes under the hammerTimepieces by Oileán, Nomadic and Dodecagon to feature in Smock Alley event, while diamonds, sapphires and pearls feature at auctions around Ireland
Read more »
Irish quartet take on Prix de l’Arc de Triomphe challenge on SundayFrench favourite Daryz bidding to be the first colt since Alleged to win Europe’s richest race back-to-back
Read more »