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Irish Daily Mirror
03-07-2025
- Business
- Irish Daily Mirror
Donohoe 'convinced' Corporate Tax will decline as 'careful' budget promised
Finance Minister Paschal Donohoe has warned that he "believes and is convinced" that Ireland's Corporate Tax intake will "stabilise and then decline". It comes amid warnings from Public Expenditure Minister Jack Chambers that Budget 2026 will be "approached with caution" and in a "careful, sensible, sustainable" manner. The Exchequer returns for the first half of the year were published on Thursday and recorded a surplus of €4.5 billion. This compares to a surplus of €3.1 billion recorded in the same period last year. However, this is largely skewed due to the arrival of the Apple money following the Court of Justice of the European Union (CJEU) ruling of last September, which ordered Ireland to collect more than €13bn in taxes plus interest from the tech company. When this money is excluded, the Exchequer surplus falls to €1.2bn, a decrease of €1.9bn on the same period last year. Minister Donohoe said that was largely due to the transfer of money to long-term Government funds. Tax revenue to end June stood at €49.5bn, €4.7bn (10.5 per cent) ahead of the same period last year. When the Apple money is not included, this falls to € 47.7 bn. However, it was still €3bn higher than the same period last year. Corporate tax intake was €14.8bn, up €2.6bn from the same period last year. However, when the Apple money is discounted, it falls to € up €900m. In a stark warning, Minister Donohoe warned that a fall in Corporate Tax is inevitable. He said: "It is difficult at this point in time to give an exact point at which I expect to see decline to begin to happen. "But what I'm convinced of is the decline will take place. I believe what we will see is that we will see the growth that we've had in the last few years begin to stabilise. "I saw some evidence of that last year when we actually missed our revised corporate tax forecast for 2024 by €1bn. "Up to the end of May, we were around €580 million behind where we expected it to be. "I believe, and I'm convinced, that we will first stabilise and then begin to decline. "The broad trigger for that will be we will see in the world that we're in at the moment, the profitability of large companies either begin to stabilise and then decline after many years of doing well or you will see their profits begin to be associated more and more with the US. "That will either happen because of trade or will happen because of global tax reform." Mr Donohoe said this "could be a number of years away" and although there would have been times when he would have been able to give "great assurances" on when things might change he said, due to "political decisions," it is harder to pinpoint the time. He added: "I didn't anticipate that we would see the kind of volatility around the rules of trade that we are now seeing at the moment and the scale of tariffs from some parts of the world now become permanent." Minister Donohoe said that while the Irish economy is expected to grow, it will now grow at a lower rate and tariffs will affect Ireland's public finances, adding, "This is why we need to be careful". He also suggested that October's budget will be "safe and good". Minister Chambers also sounded a note of caution, warning that ministers will have to "set out their real priorities". He added: "We are in a different economic context where real risks that have been flagged in recent years on a consistent basis are around us and could crystallise quickly. "On that basis, we have to have a really careful, sensible and sustainable approach to fiscal policy in how we frame Budget 2026."
Irish Examiner
05-06-2025
- Business
- Irish Examiner
Overall tax take up 8.5% as corporation taxes drop
Tax receipts for the first five months of the year rose to €38.2bn, an 8.5% increase on the same period last year. The latest Exchequer Returns figures show the State enjoyed a €4bn surplus to the end of May, an improvement of €3.2bn on 2024. However, when receipts arising from the Court of Justice of the European Union (CJEU) ruling for the Apple Tax Case are excluded, the underlying position was a surplus of €0.7bn, a decrease of €0.1bn on the same period last year. Income tax receipts of €2.8bn were collected in May with income tax receipts so far this year amounting to €14.5bn up 4.5% on last year. Corporation tax receipts of €2.5bn were collected in May, down by €1.1bn on the same month last year. The Department of Finance said this reflects once-off factors that boosted May 2024 receipts, distorting the year-on-year comparison. May is a VAT-due month and receipts of €3.5bn were up on the same month last year by €0.1bn. On a cumulative basis, receipts of €7.4bn were up by €1.1bn on the same period last year. When once-off CJEU revenues are excluded, cumulative corporation tax receipts to end-May amounted to €5.7bn, down by €0.6bn (9.4%) on the same period last year. Reacting to the figures, the Minister for Finance, Paschal Donohoe said the most notable feature of the returns was the 'marked' year-on-year drop in corporation taxes. "While this reflects once-off factors last year, it nonetheless highlights the degree of concentration in the corporate tax base, wherein a small number of multinational firms can significantly impact on the overall tax yield," he said. 'In a context of unprecedented uncertainty in the international economic landscape, this serves as a timely reminder of Ireland's exposure to changes in the global trading environment, and of the vital importance of adhering to a sensible and sustainable budgetary strategy.'
