Mr. Eddie Casey:

The issue of corporation tax and forecasts has been frequently raised. The IFAC has carried out work in this area and corporation tax is clearly the most volatile tax head of the main taxes. It also has the largest forecast errors of any of the main tax heads. It is probably not surprising that is the case given that there is huge concentration in the receipts and it is subject to idiosyncratic shocks, such as company-specific changes, for example, if a patent runs out, and changes to international tax regimes. There are many small factors and company-specific issues that can move the dial on it very quickly. In previous reports we have advised that rather than use shocks to corporation tax in individual years for additional spending, which is very often permanent if it is current expenditure, save it until it is known whether or not it will be sustainable. In 2015 corporation tax outperformed by €2.3 billion and gross voted expenditure was subsequently increased by €1 billion on the back of that. In 2016 there was a shock of €0.7 billion and gross voted expenditure rose by €0.7 billion, almost exactly in line with the shock. Rather than spend it immediately, its sustainability should be assessed before a decision is made.