Mr. Seamus Coffey:

I will begin with the point about corporation tax receipts and the inherent volatility in the contribution of the domestic sector. Even before the recent surge in corporation tax, it was the most volatile of our main taxes. It is a very cyclical tax which depends on profitability and the economic cycle. Even prior to what we are now seeing, this tax has always been fundamentally volatile. The nature of the tax means it can be quite hard to reduce that volatility. It is a tax on something which depends on the economic cycle. Other taxes are not as volatile. Even without the recent surge, that should be taken into account.

With regard to the indigenous sector, one thing to note from recent figures from the CSO is that the share being paid by foreign multinationals has remained relatively stable at approximately 80%. That means that the share being paid by domestically-owned companies has remained at approximately 20%. Whereas in 2014 such companies paid approximately €1 billion in corporation tax, they paid more than €2 billion in 2018. The figure is likely to be a bit higher again this year if the shares remain stable. There has been an increase in the amount of corporation tax being paid by indigenous or domestically-owned companies. That is an increase of 100% in the tax being paid by those companies. The amount of corporation tax being paid by Irish-owned companies now probably exceeds the figures for 2007 or 2008. The bulk of the payments back then came from the financial and banking sector as a result of the large profits they were booking. That industry is in a very different environment now. The amount of corporation tax being paid by other companies is even larger. The indigenous sector is making a contribution but it is being overlooked because of the large amounts coming from the foreign multinational, whose contribution is much greater than it was before.

However, I am not sure how we can overcome the volatility inherent in corporation tax because of the type of tax it is. The issue is how to account for it in medium-term plans.