Government warned not to rely on corporation tax in Budget 2023
The former head of the Fiscal Advisory Council has warned the government not to rely on corporation tax receipts to fund budget spending.
Exchequer results show the corporation tax take to the end of July is up 51% at €9 billion.
The urge for politicians will be to spend that money in next month’s budget.
But economist Seamus Coffey has said it’s not a reliable form of income for the state:
“The increases we’ve seen recently are driven all by external factors, whether that’s decisions by companies, in terms of their operations in Ireland, or changes introduced by the OECD or even changes introduced by the US that have maybe inadvertently resulted in huge increases in corporate tax revenues. So we shouldn’t be relying on the corporate tax rate.”