Latest news with #corporate tax
Irish Times
3 days ago
- Business
- Irish Times
Rein in spending to cut reliance on ‘volatile' corporation tax, Ibec says
Business lobbying group Ibec has called on the Government to reduce the growth of public expenditure in an effort to reduce the State's reliance on 'volatile' corporate profit tax receipts. The lobbying group said the positive status of the State's headline economic markers are largely funded by corporate tax, which its chief economist Gerard Brady said could be 'volatile' over the coming years. Ibec suggested a maximum net spend on budget day of €3 billion, with increased exchequer spending offset by fiscal drag and €1.3 billion made up of commitments under the National Development Plan. [ Ireland's corporate tax receipts hit €156bn Opens in new window ] Ibec pointed to figures showing that, should Ireland collect a level of corporate profit tax comparable to similar economies, every worker in the country would have to pay an additional €4,000 in taxes to make up the State's current tax revenue. In light of the reliance of the State's balance sheet on corporation tax, Ibec called for the Government to rein in spending increases in the coming budgets to 'return to a balance of income over expenditure, were our corporate tax receipts to be realigned with other mid-sized globalised economies'. The lobbying group said the gap stands at around €5 billion, and Mr Brady noted that recent US policy is adding to the economy's exposure to volatility with the State at risk of being left 'very short' on tax receipts should that risk materialise. Mr Brady said the Government could 'correct, fairly painlessly, the underlying budget deficit' over a number of years and would avoid 'more painful' measures in the future. He said the business community's biggest concern is of a 'sharp correction' in Government policy should that 'volatility be materialised'. Asked whether it supported Government indications that cost-of-living measures would not be needed in the Budget, Fergal O'Brien, Ibec's head of lobbying and influence, said the group was against 'universal supports'. 'We shouldn't be doing across-the-board, universal supports – it is just really bad economic policy,' Mr O'Brien said, urging the State to target distressed households and reduce the cost of business. [ The EU/US tariff deal: The good, the bad and the potentially ugly for Ireland Opens in new window ] Ibec also called for 'targeted supports' for industries hardest hit by US import tariffs, such as the the spirits industry, where Ibec noted more than 90 per cent of distilleries had paused or cut back production. Mr Brady said that some sectors would be placed under 'existential pressure' should the level of tariffs rest at 20 or 30 per cent. The lobbying group noted that their members have been 'very vocal' in raising 'a lot of concerns' about the EU's countermeasures in response to US tariffs. One measure Ibec suggested to reduce costs to businesses and households is reducing the fixed cost component on Irish energy bills through a 'strategic annual subvention'. The group also suggested indexing the top tax band and income tax credits to wage growth at a cost of €440 million and €240 million respectively. Amid economic turmoil, Ibec called on the Government not to reduce infrastructural spending, and to introduce a set of spending targets in the upcoming 2026-2029 medium-term fiscal plan. These include a fiscal investment target of 5 per cent of gross national income (GNI), and working towards increasing public investment in research and innovation to 1 per cent of GNI by 2035. To encourage homebuilding, Ibec called for the reduction of VAT to 5 per cent and the removal of Government levies on new-build apartments – which it said would 'improve the viability of apartment building'.
Irish Times
7 days ago
- Business
- Irish Times
Ireland's corporate tax receipts hit €156bn
The State's corporate tax boom has generated €156 billion in just 10 years, figures from the Department of Finance show. Despite various international clampdowns, including changes to US tax law and the introduction of a 15 per cent minimum tax rate, receipts from the business tax here have ballooned by more than 300 per cent in the past decade, rising from €6.9 billion in 2015 to €28 billion last year. The €156 billion total includes €11 billion from last year's Apple tax ruling . The Republic has, ironically, benefited from a global crackdown on corporate tax avoidance with several US multinationals including Apple, Google and Microsoft, shifting more profits to units in the Republic and away from offshore locations such as the Cayman Islands. READ MORE Despite the ongoing uncertainty around US tariffs, Department of Finance officials expect corporate tax revenue to increase again this year to approximately €30 billion. The Irish Fiscal Advisory Council (Ifac) is also predicting receipts to rise by a further €5 billion from 2026 onwards as additional revenue from the new minimum tax rate of 15 per cent flows into the exchequer. Minister for Finance Paschal Donohoe noted in recent days that approximately €16 billion of these excess receipts will have been saved in the State's two sovereign wealth funds by the end of 2025. The Juggle: the issues facing women with young children when balancing childcare and their careers Listen | 44:30 But Ifac has criticised the Government for allowing day-to-day spending to increase too quickly and for not saving more of these tax receipts. 'If you exclude excess corporation tax, the Government is spending more than it is collecting in revenue,' said Ifac chief economist Niall Conroy. 'This comes at a time when the economy is performing well, with record-high levels of employment,' he said. 'Introducing the two savings funds is an important and welcome step,' Mr Conroy said. 'However, the Government should be saving more into these funds when it is receiving huge amounts of corporation tax revenue and the economy is strong,' he said. 'By saving more now, we would be better placed to deal with future challenges such as an ageing population and climate change,' he added.
