Paschal Donohoe (Dublin Central, Fine Gael)
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The October Fiscal Monitor, published by the Department of Finance, set out the latest Exchequer position. Tax receipts of €66.5 billion were collected to end October, ahead of the same period last year by €2.5 billion (4 per cent), driven by growth in income tax and VAT. On a cumulative basis, corporate tax receipts for the year stand at €15.7 billion, €0.4 billion or 2.7 per cent lower than the same period last year.

Since 2015, corporation tax receipts have increased substantially. Last year, corporation tax receipts stood at €22.6 billion. This represented a more than doubling of 2019 receipts and a more than fivefold increase on the position a decade ago. While the Government has welcomed these receipts, we have also warned about the risks of using windfall receipts to fund permanent expenditure commitments.

In order to reduce the risks associated with the volatility of these tax receipts, the Government has taken a number of steps.

Firstly, the formulation of fiscal policy, as set out in the annual Summer Economic Statement, takes account of latest macroeconomic and tax forecasts including the windfall nature of certain of the corporation tax receipts. The core expenditure growth rate for 2024 of 6.1 per cent is based on a balanced approach taking account of the elevated inflation levels and the need to ensure sustainability of investment in public services. The use of temporary non-core expenditure over recent years has also enabled the Government to respond to external challenges such as the pandemic, war in Ukraine and elevated inflation levels whilst protecting investment in day to day services and infrastructure.

Secondly, as part of the Government’s fiscal strategy announced as part of Budget 2024, two new funds will be established. The Future Ireland Fund and the Infrastructure, Climate and Nature Fund will help to future proof our economy and public finances by investing windfall corporation tax receipts to help prepare for future fiscal challenges and to assist in funding capital and climate-related projects. This will also enable us to maintain our investment plans over the longer term.