Mr. Gerry Howard:

I would like to make a few general comments on the matter, following which I will try to address the specific questions raised.

The performance of corporation tax receipts was stronger than expected in 2015, with total receipts of €6.9 billion in comparison with a figure of €4.6 billion in 2014, which represents an increase of 49%. Receipts were about 50% ahead of the forecast. Up to end August 2016, they were once again ahead of the forecast, running at about €3.5 billion, or approximately €500 million or 17.1% higher than the forecast. Approximately €300 million, however, may have to be refunded later. This year, excluding the potential for refunds, we anticipate that receipts will be approximately €200 million, or 7%, ahead of the forecast.

As members will probably be aware, corporation tax receipts are highly concentrated, with a high proportion coming from the foreign direct investment multinational sector. In 2015 approximately half of the increased corporation tax receipts came from a small number of companies. This was attributable to various issues, including - I must be mindful of the need for confidentiality for individual taxpayers - the profitability of some businesses, improved trading conditions and, in some instances, currency fluctuations. Although corporation tax receipts are concentrated in the multinational sector, it is fair to say the base for the additional corporation tax receipts is relatively broad, with improved receipts from Irish businesses also.

It is not just foreign direct investment companies that have aided matters. Our indigenous industry has also increased. A large number of companies have returned to profitability so that is the part of the increase. Proportionately, it is a smaller part of the yield but I suggest that it is still significant in the long term.

Corporation tax for 2016 was forecast to grow to about 9.7% from 8%. It was not linked to the potential growth in the economy. I suggest that corporation tax for this year is likely to be in the region of €6.5 billion, which is about 14% of the total tax take for this year. That is what we estimate will happen this year.

The Deputy asked about the future sustainability of the corporation tax yield. Predicting the future is difficult and someone would be very difficult if he or she thought he or she knew what the future held. There is no particular issue that suggests that it will drop but we do not know. It depends on future profitability. A small number of companies pay a disproportionately large amount of tax as part of corporation tax so how these companies perform in the future will impact on the future yield and its sustainability. Another factor is indigenous industry as it returns to profitability. The long-term effect of that is also very difficult to predict. I would be cautious. We have €6.5 billion but I would not like to predict what it will be in the future. It is there at the moment and we have no reason to think it will change in respect of particular issues.