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Monday, May 20, 2024

A recent report has revealed an astonishing statistic – only 3 companies contribute a large share of the total corporation tax


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New research from the Irish Fiscal Advisory Council (IFAC) reveals that just three corporate groups account for around a third of all corporation tax receipts in the State. These three entities paid between 30-38% of corporation tax revenues between 2017 and 2021, with a total of €5.2 billion paid in 2021. This marks a dramatic increase from the 4% of total tax revenues paid in 1984.

This highly concentrated reliance on a small number of large, foreign-owned multinationals is further highlighted by the fact that 60% of corporation tax receipts in 2022 were paid by only 10 corporate groups, who paid €8.3 billion in total. The ICT and pharma-chem sectors are estimated to have accounted for more than 90% of the corporation tax paid by these top 10 groups.

The IFAC has warned that these figures carry significant risks, and that one-off firm or sector-specific shocks could have a major impact on the State’s corporation tax receipts. These shocks could include changes to senior management, patent cliffs, supply chain disruptions, group restructurings, or even a shortage of skilled labour.

The council has recommended that policymakers closely monitor the performance of the top three firms when assessing the future sustainability of corporation tax revenues. They also suggest that the government should not use ‘excess’ corporation tax payments to fund permanent spending increases or permanent tax cuts, but rather save the receipts in a National Reserve Fund to prepare for future challenges.

In conclusion, the IFAC’s chair Sebastian Barnes stated that “This new analysis shows how dependent Irish corporation tax receipts are on a handful of big multinational companies”, and that a “more granular approach is warranted to better understand who the leading corporation taxpayers in Ireland are and estimate how much they pay.”

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Eric is a talented writer who has worked as a journalist for 8 years now. With a wealth of experience in journalism, he brings a unique perspective to his work. Eric is known for his ability to write about complex topics in a way that is easy for readers to understand. His articles are insightful and thought-provoking, and he always strives to provide balanced coverage of the news. Eric is dedicated to his craft and spends countless hours researching and fact-checking his stories. When he's not writing, Eric enjoys hiking, reading, and spending time with his family.

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