Gerald Nash (Louth, Labour)
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227. To ask the Minister for Finance the reason corporation tax forecasts from his Department have been inaccurate for 13 consecutive years; the reason this has not prompted an independent review of the forecasting models in use in his Department; if he will commission such a review on an urgent basis; and if he will make a statement on the matter. [50472/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, the corporation tax base is extremely concentrated, meaning that the overall yield can be substantially impacted by the activities of a small handful of firms. Last year, ten firms accounted for well over half of all receipts: indeed, analysis by the Irish Fiscal Advisory Council suggests that as few as three firms could account for a third of receipts.

This makes forecasting these receipts exceptionally challenging. My officials engage with the Revenue Commissioners when preparing the bi-annual forecasts of tax revenue. This input is of particular importance in respect of corporation tax given the magnitude of the concentration in the tax base.

Furthermore, my Department reviews its tax forecasting methodology periodically via the Tax Forecasting Methodological Review Group, which publishes a report setting out recommendations on potential improvements to the forecasting process. The group, which consists of officials from my Department, the Revenue Commissioners, Central Bank of Ireland and European Commission, published its most recent report in 2019. The report found that the overall performance of the methodology was robust and in line with international best practice, although it was noted that there were significant challenges in forecasting corporation tax.

The report is available at the below link:

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