RTÉ Brainstorm – Is Ireland too dependant on corporation tax?
Whitaker Institute member Stephen McNena, of the Performance Management cluster, has written a new article for RTÉ Brainstorm. The piece looks at Ireland’s dependency on corporation tax.
Is Ireland too dependant on corporation tax?
Analysis: while corporation tax returns have surged in recent years, there are several risks associated with depending on this windfall
Corporation tax is a tax charged on profits and gains made by companies. The returns to the Exchequer for this tax have generally increased since 2000, but have been volatile. Receipts trended upwards from about €4bn to over €6bn from 2000 to 2010. As company profits fell during the Great Recession of 2008 to 2012, corporation tax followed, falling back below €4bn. The largest increases have happened since 2014, when revenues were about €4.6bn. By 2016, they exceeded €7bn, and net receipts crossed the €10bn level during 2018.
By this stage, questions were being raised about the sustainability of this level of tax revenues. The growth continued, with receipts of close to €12bn in 2020. Last year, corporation tax revenues grow by close to 30% to over €15.3bn. To give a better idea of the scale of these tax revenues, the 2021 figure is over €3,000 per person and €6,000 per worker, based on five million people and 2.5 million workers. Continue reading…