Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I am not complacent regarding the risks posed by the increasing share of corporation tax within overall taxation revenues. Along with officials in the Department of Finance, I have identified this risk on several occasions, most recently in the April stability programme update and the Department's annual taxation report. The sharp increase in corporation tax is a notable development in recent years. There are a number of other concerns, including the concentration of receipts within a smaller group of firms. A shock to the corporate tax base cannot be discounted, particularly in light of change and uncertainty in the international policy environment. Sector-specific shocks could reduce corporate profitability with adverse implications for future corporation tax receipts. As I have outlined previously, it is imperative that we ensure increases in public expenditure, particularly current expenditure, are sustainable and are not financed by potentially transient revenue streams. I would like to mention four steps we have taken in this context. A contribution of €500 million is being made to the rainy day fund that has been set up for 2019. We made an effort in this year's budget to broaden our tax base by reversing the temporary tax reduction in the hospitality and service sector. I have an ongoing commitment to seeking to find ways of reducing our national debt via windfall gains. We are aiming to deliver a surplus of 0.2% of our national income this year, and I hope to move to a higher surplus next year. The question of how we can manage this better in the future is an ongoing policy matter. In next week's summer economic statement, I will look at analysing the level of risk further and I will propose options to the Oireachtas for debate across the year regarding how this issue can be managed on a year-to-year basis.

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