Thursday, 3 October 2019

Questions (60, 61)

Michael McGrath

Question:

60. Deputy Michael McGrath asked the Minister for Finance the amount of corporation tax collected in each year since 2010; the percentage of total tax take accounted for by corporation tax receipts in each year since 2010, in tabular form; and if he will make a statement on the matter. [40392/19]

View answer

Michael McGrath

Question:

61. Deputy Michael McGrath asked the Minister for Finance his plans to review the sustainability of corporation tax receipts; his plans to reduce the dependence of Ireland on corporation tax receipts; and if he will make a statement on the matter. [40393/19]

View answer

Written answers (Question to Finance)

I propose to take Questions Nos. 60 and 61 together.

The information that the Deputy has requested in respect of corporation tax receipts and their percentage of the total tax date, since 2010, is provided below in tabular form.

Year

CT (€ millions)

As a % of Total Tax Take

2010

3,924

12.4

2011

3,520

10.3

2012

4,216

11.5

2013

4,270

11.3

2014

4,614

11.2

2015

6,872

15.1

2016

7,351

15.4

2017

8,201

16.2

2018

10,400

18.7

 

The Deputy will be aware that the years 2009 and 2010 represented the lowest points in the collection of corporation tax during the fiscal crisis.  The pre-crisis peak by value collected was c.€6.7 billion in 2006, and corporation tax represented 16% of total net tax receipts in 2003.

I acknowledge that Corporation tax (CT) receipts, amounting to almost 19% of tax receipts in 2018, represent a sizable element of our overall Exchequer tax receipts. However, it should be noted that by way of context that combined income tax and VAT account for about two thirds of our overall receipts. Corporation tax receipts are performing strongly, driven by increased company profitability.

I have asked my officials to look at potential policy options to mitigate against the risk of an over-reliance on corporation tax, to ensure the sustainability of the public finances, and work is ongoing in this regard.

Actions taken by the Government to mitigate the risks associated with the potential volatility of corporation tax revenues include:

- The creation and funding of the rainy day fund.

- Prioritising reduction of debt.

- Running an Exchequer surplus in 2018.

- Continuing to broaden the tax base, through measures such as the restoration of 13.5% VAT for the hospitality sector and introduction of sugar-sweetened drinks tax.