Mr. Seamus Coffey:

There is no doubt that corporation tax receipts are highly concentrated, whether measured by group or by company. It would be useful if we could compare it internationally with other small countries and see what type of concentrations they have. However, we have been unable to find statistics. If we are the people looking at it, the suggestion is that it is more of an issue here. If it was an issue in other countries, we would expect those responsible to be looking at it.

We have an analytical note on the volatility of corporation tax. It is the most volatile of the main tax heads. The advice will remain the same. When we look at setting sustainable fiscal policy, we should not look at windfall revenues or volatile revenues. We are looking at setting the growth rate of expenditure at the potential long-run growth of the economy. That puts it on a more sustainable footing.

Receipts such as corporation tax should not be feeding in to budget discussions. If we are looking at Exchequer returns on a monthly basis and saying that corporation tax is below profile and that means we have a tighter budget, it may be problematic. We should be moving away from that type of conversation to setting our budgetary policy on a more long-term and sustainable footing.

There is important information within the Exchequer returns and what happens to various taxes every month, but taxes in any given year being below or behind profile should not affect the budgetary policy for the following year unless there are significant issues that have underlying macroeconomic problems. If it is simply a case of natural volatility in the receipts, then we should examine it and ask what happens with the overall pattern in the year. We should be looking at October's budget on the basis of what we need to do in 2018 rather than what is happening to the tax receipts in 2017. Our view is that we should move away from focusing on more short-term measures and having headlines changing based on what is coming out from month to month to a more long-term basis.

Corporation tax will remain volatile and concentrated. It has become an important source of revenue, up to 15% of Exchequer tax receipts. I do not believe it has ever been above that level, although it got close previously. It is now almost at the highest level. Contributions from previous speakers have suggested this increases our reliance on foreign direct investment and that we have employment and income tax benefits. Now, because of various changes, many of which are international, although some are domestic, there have been increases in corporation tax payments in Ireland. Our view would be to be cautious.