Minister Donohoe welcomes publication of Corporation Tax Paper
Foilsithe
An t-eolas is déanaí
Teanga: Níl leagan Gaeilge den mhír seo ar fáil.
Foilsithe
An t-eolas is déanaí
Teanga: Níl leagan Gaeilge den mhír seo ar fáil.
The Department of Finance today (Friday) published a technical paper on Corporation Tax, titled Modelling Recent Developments in Corporation Tax . The paper is authored by economists within the Department, Gerard McGuinness and Diarmaid Smyth.
The paper focuses on recent trends in corporation tax (CT) revenues, noting the significant increase in recent years, reaching €10.4 billion in 2018. Since 2014, receipts have grown by close to 20 per cent on average per annum. As a result, the share of the exchequer tax take accounted for by CT reached an historic high of 19 per cent last year. A portion of this increase was ahead of budget day projections, particularly in terms of one-year ahead forecasts.
The paper looks in detail at CT developments, from both a micro- and a macro-economic perspective with several important findings. Using a suite of models, the paper finds that most of the CT outturn in 2018 can be accounted for by economic data, specifically corporate profitability and economic growth more generally.
The marked rise in CT receipts and corporate profitability is highlighted, as is the concentrated nature of revenues amongst a number of key multinational dominated sectors, specifically pharmaceuticals, technology and finance. These account for close to 80 per cent of receipts.
Welcoming the work undertaken by his officials, Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, said:
"This paper acts as another reminder of the heightened growth in CT receipts in recent years, some of which exceeded even departmental projections. Much of this relates to increased corporate profitability. As such, we must be cautious not to become too reliant on this tax head, especially in light of the changes taking place in the wider global economy. Ensuring the resilience of the public finance, through the building up of financial buffers in the form of enhanced budgetary surpluses, is so important as this will act as a support mechanism for the economy and society in the years ahead."
ENDS
Contact:
Deborah Sweeney - Press Adviser to Minister Donohoe - 086 858 6878
pressoffice@finance.gov.ie 01 6760336