Taoiseach accepts Ireland’s heavy reliance on corporate tax is a concern

Taoiseach Micheál Martin has acknowledged that Ireland’s dependence on corporation tax has become a concern, even as receipts continue to rise. Corporation tax revenue reached €2.8 billion in August, one third higher than in the same month last year.

Speaking to RTÉ News in County Cork, Martin warned that a substantial share of the revenue could represent a windfall or a one-off payment. “It is a concern, because we have to be very mindful of the fact that quite a significant amount of that may be windfall, may be once off and may not be there forever,” he said.

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It is a concern, because we have to be very mindful of the fact that quite a significant amount of that may be windfall, may be once off and may not be there forever.

At the same time, Martin said government spending had climbed sharply since 2020, particularly after the COVID-19 pandemic and the unprecedented interventions that followed. Public expenditure now sits at a higher level than before that period, he said, making value for money a priority as spending rises above the profiles set for individual departments.

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Parallel with that, our public expenditure has grown very, very significantly since 2020, particularly the onset of Covid and the unprecedented interventions we've made, so it's at a higher plateau now, public expenditure, than it would have been prior to that era.

The government plans to set aside some corporation tax revenue for the Future Ireland Fund, which is intended to help address the costs of an ageing population and rising healthcare needs. Other revenue is supporting large infrastructure projects, including the metro and Cork’s commuter rail project. Martin said these investments would expand the economy’s productive capacity and contribute to climate goals and decarbonisation as the population grows.

He also said the Budget is being prepared around a package of income-tax reductions, support for families facing childcare costs and measures to ease expenses associated with disability. Martin made the comments while opening an extension at Kinsale Community School.

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What I would say to balance the fact that we are, yes, depending - overly dependent - on corporation tax revenues, we are using it for the productive sector, so it's the productive capacity of the economy.