Current spike in corporation tax no temporary windfall, says department

Officials from the Department of Finance have insisted the current spike in corporation tax receipts is not a "once-off" and will continue into next year.

Secretary general Derek Moran, however, admitted the department did not have a clear handle on what was underpinning the surge.

The latest exchequer numbers show Government revenue from corporation tax this year is now running 74 per cent ahead of target at €4.7 billion.

The huge gap between target and out-turn has raised questions about the sustainability of such revenues.

Addressing the Public Accounts Committee, Mr Moran said there was probably a range of explanations for the better-than-expected performance.

He cited improved trading conditions, favourable currency movements and Frankfurt’s unprecedented stimulus programme as the most likely reasons.

He also noted that more companies were paying tax as the economy exited recession.

Mr Moran said the department had received strong assurances from Revenue that the surge was not a temporary windfall and would continue into next yeat.

“This isn’t a once-off, it’s a lift in the overall level,” he said.

“It is going to take us some time to drill down into this…we do have to understand what has happened and what lies behind it,” he said, noting detailed tax returns next year will provide a clearer picture.