By Dominic McGrath, PA
Paschal Donohoe has provided the latest projections of how Ireland’s tax receipts will be impacted by changes to global tax policy.
Ireland’s corporate tax revenue will face a significant decline in the coming years, the finance minister predicted on Tuesday.
Paschal Donohoe said that changes in global tax policy will have a detrimental impact on Ireland’s corporation tax receipts throughout the next few years.
Speaking at Government Buildings on Tuesday afternoon, Mr Donohoe said that he expects Ireland’s corporation tax revenue will fall by around half a billion euro per year over a three to four-year-period.
“By the mid-2020s, we are expecting that our corporate tax collection will be one and a half to two billion euros lower than it otherwise would have been in the absence of a climate change that has now happened in corporate tax policy,” he said.
A new report on tax, published by the Department of Finance on Tuesday, warns: “Corporation tax revenues provided a welcome boost to the public finances, but simultaneously highlighted the risks associated with the concentration of receipts amongst a relatively small number of large foreign-owned payers.”
Earlier this year, G7 countries signed up to having a corporation tax rate of at least 15 per cent. Last month, Mr Donohoe vowed to defend Ireland’s 12.5 per cent corporation tax.
Mr Donohoe said that he hoped that the Government would be clearer on the OECD tax agreement by October. He also said it was important to look carefully at how any agreement would be implemented — something he said might be clear by the early part of 2022.
Ireland was one of only five nations not to sign up to the major OECD agreement, which is backed by more than 130 countries worldwide, as well as the EU.