Dáil Éireann Debate, Tuesday - 9 May 2023
97. Deputy Willie O'Dea asked the Minister for Finance his estimate for corporation tax receipts in 2023; the proportion of tax revenues that corporation tax receipts will comprise in 2023; the proportion of corporation tax receipts he estimates as windfall; and if he will make a statement on the matter. [21490/23]
View answerMy Department set out its spring economic and fiscal forecasts in the Government's Stability Programme Update that was published in April.
Corporation tax receipts are projected at €24.3 billion this year, which would amount to 27 per cent of the total projected tax-take for 2023.
My Department estimates that almost €12 billion, or approximately half, of corporation tax receipts is ‘windfall’ in nature. My Department has signalled a more appropriate fiscal measure - GGB* - which is the headline general government balance excluding windfall tax receipts. On this basis, an underlying deficit of €1.8 billion is in prospect for this year .
It is crucial that ‘windfall’ corporation tax receipts are not used to fund permanent expenditure. This is why the Government transferred €6 billion to the National Reserve Fund over the last year.
The Government has repeatedly warned that it would be inappropriate to build up permanent fiscal commitments on the basis of transitory, windfall revenues. Accordingly it is my intention to establish a longer-term savings fund, capitalised by these windfall receipts. The monies will be drawn-down at some stage over the next decade (the 2030s onwards) inter alia to partly finance the budgetary costs associated with an ageing population.
