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Irish Times
an hour ago
- Irish Times
The Irish Times view on Ireland's budget policy: betting on a tax boom
The latest report from the Irish Fiscal Advisory council (Ifac) neatly sums up the difficulty of forecasting what happens next in the Irish economy. Facing significant uncertainties, most notably from the policies of US president Donald Trump, the economy could take a hit, or could hold on to most of the gains of recent years. One thing is for sure, however. Ireland is relying ever more heavily on corporation tax. And the report from the budget watchdog suggests how the Government should respond. These recommendations are, by now, familiar, but that does not mean they should be dismissed. The Government has, wisely, started to put cash aside in case of a downturn. And this should certainly help if any reversal was temporary. However, Ifac points to structural issues too – longer-term trends which need to be addressed. One, a common theme of these reports, is Ireland's reliance on just a few major US companies for a significant amount of corporate tax revenue. When the part of corporate tax revenues relating to tax planning is factored out, Ifac estimates that the underlying budget position is in deficit. There are also problems on the spending side of the budget, which have received little attention to date. Ifac criticises the Government for its budgeting for this year, saying that it failed to take into account overruns for 2024 which had increased the spending base. As a result, spending for this year could be €3 billion above budget, it estimates. READ MORE Significant overruns have become common, but have been offset by tax also coming in ahead of target. Relying on this continuing is unwise. To combat this, Ifac calls for better spending control and a clear target – or anchor – for the level of spending increases which is then adhered to. As the report points out, corporation tax could grow further, helping to underpin the public finances. But the risks, too, are obvious. Either way, the lack of control on day-to-day public spending is notable and does not suggest proper management, or a focus on value for money.
Irish Times
2 hours ago
- Irish Times
Warnings about corporation tax fall on deaf ears as money keeps rolling in
The Irish public might well have become desensitised to warnings about corporate tax . We've had 10 years of warnings about the concentration risk at the heart of the business tax base – the dangers of having such a large chunk of State income hanging on the fortunes of just a few firms – but it's not obvious anyone is listening any more. And not when receipts keep rising and rising in the face of these warnings. Last year, they reached a record €28 billion (excluding the €11 billion that flowed in from the Apple tax case). And even now, with a tariff-loving, America-first Donald Trump in the White House promising a big clampdown on US multinationals that have offshored their manufacturing operations to the Republic and elsewhere, our corporate tax receipts are projected not to fall but to keep rising. READ MORE The Irish Fiscal Advisory Council (Ifac) says it is predicting another surge in receipts on the back of several favourable trends. First, it expects receipts to rise by about €5 billion from 2026 onwards as additional revenue from the new global minimum tax rate of 15 per cent flows into the exchequer. It also noted that most of the big taxpayers here are not affected by trade tensions and are forecast to report increased profits this year, resulting in higher tax payments this year and beyond. Many of these firms have also been availing of generous tax-cutting capital allowances which are due to run out, meaning they will be liable for more tax. And finally, the current surge in pharmaceutical exports, which jumped by 154 per cent in the first quarter as firms rushed to get merchandise into the US before tariffs, is likely to result in bigger tax payments this year. How to manage your pension in these volatile times Listen | 37:00 Ifac chairman Seamus Coffey said the State's corporate tax base was between €28 and €30 billion, but 'go four or five years you could have a forecast range of plus or minus €15 billion.' If the plus margin of error pertains, that points to a corporate tax base of €40 billion, eight times what it was a decade ago. All of which begs the question: are we making the best use of this seemingly evergreen windfall?
Irish Independent
6 hours ago
- Irish Independent
US and Iran nuclear talks to resume on Thursday, says Donald Trump
Atomic agency boss speaks about Tehran's claimed 'seizure' of Israeli nuclear secrets ©Associated Press Today at 21:30 US president Donald Trump last night said the US and Iran would continue talks on Thursday for a nuclear deal, adding that Tehran was a tough negotiator and the main impediment to an agreement was over enrichment. 'We're doing a lot of work on Iran right now,' Mr Trump told reporters at an economic event at the White House.
