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.
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.
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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?
