Dr. Kieran McQuinn:

I think attracting multinational corporations to this jurisdiction has been part of our economic and industrial policy for a very long time. It has served this country very well. It has transformed the country in many ways. The revenue corporation taxes have provided over the last three to five years, or even longer, is substantial. If used properly and prudently they can bring huge benefits to the country. We can use them particularly to transform parts of our infrastructure, if this is the logical place we think they should be spent, rather than on funding current expenditure. If we channel those funds in a prudent fashion, they can transform many of the infrastructural challenges we face.

I do not have a problem with the fact that we are in receipt of large amounts of corporation tax. That is a good thing to have as long as we spend it in a wise and prudent fashion and are not using it to prop up current expenditure. This is not something people have been able to do any particular analysis on but there is a growing feeling in this area. With the most recent international reforms of the corporation tax sector, the default position from an Irish perspective was that we would lose out on receipts, although not so much on jobs or investment. It may be that we might actually benefit. That was not the received wisdom.

For pillars 1 and 2, where we were expected to lose out in some ways, it is a little unclear how much progress will be made on those items. The fact is that multinational firms above a certain size will all be paying 15% tax as opposed to 12.5%. Over the coming years, that could lead to a continuation. It would not be the same rate of increase but it could lead to a continuation of an increase in corporation tax receipts. When we are thinking about these issues, we think about upside risks and downside risks. We tend to focus on downside risks, which is fair enough, but we probably also need to think about the fact that we may well continue to get these corporation tax receipts going forward. Therefore, we need to plan the best way to use them.