{"id":26569,"date":"2022-06-20T12:06:30","date_gmt":"2022-06-20T16:06:30","guid":{"rendered":"http:\/\/irishexaminerusa.com\/wp\/?p=26569"},"modified":"2022-06-20T12:06:34","modified_gmt":"2022-06-20T16:06:34","slug":"donohue-warns-of-danger-of-relying-on-corporate-tax-receipts","status":"publish","type":"post","link":"https:\/\/irishexaminerusa.com\/wp\/?p=26569","title":{"rendered":"Donohue Warns Of Danger Of Relying On Corporate Tax Receipts"},"content":{"rendered":"\n
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Minister for Finance Paschal Donohoe said corporate tax receipts create an “artificially benign picture” of the public finances (PA Images)<\/em><\/figcaption><\/figure>\n\n\n\n

The Minister for Finance has warned of the dangers of relying on high levels of corporate tax receipts, saying they create an \u201cartificially benign picture\u201d of the public finances.<\/p>\n\n\n\n

Paschal Donohoe said there is a clear need to pull back on the country\u2019s reliance on corporate tax receipts.<\/p>\n\n\n\n

Speaking at the National Economic Dialogue at Dublin Castle, Mr Donohoe said corporate tax receipts now account for \u20ac1 in every \u20ac4 collected in exchequer tax revenue.<\/p>\n\n\n\n

He said this figure is well in excess of both historical and international norms.<\/p>\n\n\n\n

\u201cIn a world that has become so susceptible to unforeseen shocks, it is even more important that we prepare now for the risks that we know are ahead,\u201d Mr Donohoe added.<\/p>\n\n\n\n

\u201cThere is a clear need to reduce our dependency on corporate tax receipts, which now account for \u20ac1 in every \u20ac4 collected in exchequer tax revenue, a figure that is well in excess of both historical and international norms.<\/p>\n\n\n\n

\u201cThese excess receipts present an artificially benign picture of the public finances.<\/p>\n\n\n\n

\u201cMoreover, half of corporate tax receipts are sourced from just 10 large firms. So to put it another way, around \u20ac1 in every \u20ac8 in total tax collected by the State is sourced from a very small number of firms.<\/p>\n\n\n\n

\u201cWe have to be vigilant to the risks inherent in this level of concentration.<\/p>\n\n\n\n

\u201cOur success in attracting high-quality multinational firms to Ireland has paid dividends, creating highly-paid jobs and boosting our tax receipts.<\/p>\n\n\n\n

\u201cBut concentration risks as well as changes to the international tax landscape mean we cannot rely on this revenue stream continuing forever \u2013 we must not build permanent expenditure on transient revenue streams.\u201d<\/p>\n\n\n\n

The Government is meeting representatives from various businesses and industry groups on Monday to discuss the upcoming budget in October.<\/p>\n\n\n\n

Those attending the event include representatives from community, voluntary and environmental groups, business, unions, research institutes and the academic community.<\/p>\n\n\n\n

Meanwhile, Taoiseach Miche\u00e1l Martin said that while Ireland rebounded \u201cstrongly\u201d from the financial and social pressures of Covid, he warned the international economic outlook is \u201cvery serious\u201d.<\/p>\n\n\n\n

\u201cThrough our efforts over the last two years we are positioned in a better place than many others,\u201d Mr Martin added.<\/p>\n\n\n\n

\u201cThat is not to say, however, that the coming period ahead will not be challenging.<\/p>\n\n\n\n

\u201cWith the uneven receding of the pandemic around the world we saw the emergence of inflationary pressures.<\/p>\n\n\n\n

\u201cThis situation was subsequently exacerbated, to an enormous degree, by the illegal and reprehensible Russian invasion of Ukraine \u2013 with, in addition to the terrible humanitarian impact, its effect on international energy and commodity flows.<\/p>\n\n\n\n

\u201cWith this invasion, inflationary pressures became a very real challenge for households and businesses in Ireland \u2013 bringing with them great concern and worry.\u201d<\/p>\n\n\n\n

Mr Martin told delegates that the war in Ukraine threatens international trade.<\/p>\n\n\n\n

\u201cThis marks an acceleration of the trend, which we also saw during the pandemic, towards on-shoring and reshoring and will impact future global trade and investment flows,\u201d he added.<\/p>\n\n\n\n

\u201cRecent steps by the UK government in relation to the protocol can only add to uncertainty at this time.<\/p>\n\n\n\n

\u201cMost recently the European Central Bank has reduced its growth forecasts and raised its projections sharply for inflation.<\/p>\n\n\n\n

\u201cInterest rates will begin to rise in a graduated way from July, meaning the cost of borrowing for households and businesses will also rise.<\/p>\n\n\n\n

\u201cThe truth is we don\u2019t know what might unfold in the global economy over the coming months and years \u2013 but there are clear dangers already apparent within the eurozone, and across other developed economies.<\/p>\n\n\n\n

\u201cThese trends carry significant risks for an open, trading economy, such as ours.<\/p>\n\n\n\n

\u201cAs a country we have gained enormously from globalization, allowing us to become a successful producer and exporter of knowledge-intensive goods and services, by both our indigenous and foreign direct investment firms.<\/p>\n\n\n\n

\u201cHaving benefited greatly from international trade and integration into the global economy, we will not be immune to international pressures and developments.\u201d<\/p>\n

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