Noel Rock (Dublin North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

168. To ask the Minister for Finance his views on the European Commission's report on the economy, which highlighted the State's dependence on corporate tax revenue as a concern; and if he will make a statement on the matter. [11877/17]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In 2016, Exchequer corporation tax receipts of €7,351 million represented an important revenue source, accounting for just under 15.5 per cent of all Exchequer tax receipts. However, by way of context, it is important to point out that income tax and VAT accounted for around two-thirds of the total tax yield last year.  Furthermore, it should be noted that corporation tax as share of all Exchequer tax revenues in 2016 is in-line with previous parameters.  For example, throughout the first half of the last decade, corporation tax receipts varied in a range between 14-16.5 per cent as a share of all Exchequer tax revenues.  

My Department and the Revenue Commissioners have highlighted on many occasions that corporation tax is highly concentrated in Ireland, with approximately 80 per cent of receipts received from the multinational sector.  In addition, in 2016, it is estimated that the top ten tax paying companies accounted for around 37 per cent of the total corporation tax receipts, down slightly from an estimated 41% in 2015.  It is for these reasons that a potential concentration risk in corporation tax receipts, was acknowledged and highlighted in the Budget 2017 document.

In terms of the sustainability of the corporation tax receipts, following the 'level shift' in 2015, these receipts increased by a more modest 7 per cent in 2016.   For 2017, the corporation tax forecast produced by my Department with assistance from the Revenue Commissioners is prudent.  Overall growth of 5.0 per cent in corporation tax is projected for 2017, which is comfortably below the year-on-year growth recorded in 2016.   

Finally, to sustain the hard won improvements in our public finances, we must guard against complacency and maintain our prudent management of the public finances in order to provide a sustainable budgetary platform upon which funding for the provision of public services can be provided for the years ahead.  Accordingly, we are committed to complying with the fiscal rules, which are designed to ensure that increases in public expenditure are sustainably financed and decoupled from dependence on cyclical or windfall revenues.