Marc MacSharry
Ceist:352. Deputy Marc MacSharry asked the Minister for Finance the way in which corporation tax receipts held up in 2020. [1863/21]
Amharc ar fhreagraWednesday, 31 March 2021
Ceisteanna (352)
Freagraí scríofa
Corporation tax receipts demonstrated strong growth in 2020 despite Covid-19, increasing by almost €950 million to reach €11.3 billion, the highest level on record. This, and a resilience in income tax receipts, boosted the fiscal position and prevented a more severe deterioration in the public finances.
These receipts are welcome, and a reflection of the success of our industrial policy in attracting high-quality firms to Ireland. There is evidence that, in particular, the pharmaceutical, ICT and financial sectors have contributed to the record level of receipts received in 2020. The continued strength in corporation tax revenues means that we are borrowing less than would otherwise be the case.
However, as the Deputy will be aware, I have stated on many occasions that corporation tax receipts are subject to exceptional volatility and unpredictability. Receipts are vulnerable to the business decisions of a relatively small number of large, multinational firms.
Additionally, forthcoming changes to the international tax regime are likely to negatively impact upon revenues. My Department has projected that the implementation of the OECD BEPS reforms may lead to fall of €500 million per annum in corporation tax receipts from 2022 onwards. Corporation tax receipts are not a sustainable basis upon which to make permanent expenditure commitments.
My Department will be updating its medium-term forecast of corporation tax receipts as part of the Stability Programme Update in April.