Dáil Éireann Debate, Wednesday - 11 July 2018
150. Deputy Joan Burton asked the Minister for Finance his plans to take action on the issues identified in the April 2018 Revenue Commissioners report, Income Dynamics and Mobility in Ireland: Evidence from Tax Records Microdata in particular in respect of the narrowness of the corporation tax base; and if he will make a statement on the matter. [31077/18]
Amharc ar fhreagraIt is my understanding that the Deputy is referring to Revenue’s ‘Corporation Tax 2017 payments and 2016 returns’ report published in April 2018.
I recognise that Corporation Tax in Ireland is concentrated, with a high proportion of receipts, approximately 80%, coming from the multinational sector. The share of net corporation tax receipts provided by the “Top 10” tax paying companies in 2017 was 39 per cent, up slightly from the 37 per cent paid in 2016 but still below the 41 per cent in 2015, which is suggestive of widening profitability in other companies. The report also provides information on receipts in each of the years 2013 to 2017 from the top ten payers in each given year, illustrating the change in composition of the top 10 payers over time. Overall, while there are variations from year to year, this level of concentration is relatively stable over recent years.
Furthermore, the evidence from this report indicates that Corporation Tax receipts have not become significantly more concentrated as a percentage of overall tax receipts in recent years. In 2013, the Top 10 taxpayers accounted for 36% of Corporation Tax receipts, while in 2017 the Top 10 taxpayers accounted for 39% of Corporation Tax Receipts.
The report also notes that the number of net payers of corporation tax increased by nearly 6,300 (14%), with over 50,000 companies paying net corporation tax in 2017, and shows trading profits increasing in the majority of sectors. Both these factors point to a general, broad-based improvement in profitability in the corporate sector.
As a country which has been consistently successful in attracting leading multi-nationals to locate here, and given Ireland’s level of integration with the global economy, it is not surprising that our corporation tax base is quite concentrated. Nonetheless, I am not complacent to the risks associated with the concentration of corporation tax receipts and will continue to monitor the situation closely.
Deputies will be aware that the Government has committed to the establishment of a Rainy Day Fund to enhance the resilience of the public finances. The objective of the Fund is to build up our fiscal reserves in times of strong Exchequer revenue performance so that we have room for manoeuvre in the event of a shock to the economy in the future.
