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LAST UPDATE | 11 Jun 2019
THE GOVERNMENT NEEDS to start “weaning itself off the reliance on corporation tax”, the Irish Fiscal Advisory Council (IFAC) has warned.
The latest report by the State’s budgetary watchdog has said that the Irish economy has “recovered from a deep crisis” but that the current outlook is “unusually uncertain”.
IFAC says that the government’s forecasts assume “an orderly and agreed” Brexit but that there is the potential for “an exceptional adverse shock in the form of a harder-than-assumed Brexit”.
One of the aspects the watchdog questions is the role of corporation tax in the planning for exchequer funding.
The report outlines that some €3-6 billion of the €10.4 billion corporate tax receipts received in Ireland in 2018 “could be considered above conventional levels” and as such could not be relied upon.
“Corporation tax receipts in Ireland are now a long way from conventional levels and from what the underlying performance of the economy would imply,” the report states.
Unlike typical revenue windfalls, these gains might persist for a number of years before reversals could be expected. They also represent a net injection to the Irish economy, given that foreign-owned multinational enterprises contribute four-fifths of receipts.
The report states the government’s medium-term plans are “not credible” and a “gradual move” away from the reliance of corporation tax is recommended.
IFAC also recommends a “better approach to budgetary planning” that should include “a better specified debt target” and “more realistic forecasts for spending”.
Speaking to reporters today, Finance Minister Paschal Donohoe defended the government’s economic policies but also acklowelged that corporation tax receipts could dip.
“There are changes that could take place that could affect the level of corporation tax that we will be collecting across the coming years. What is different to where we were a year ago is there is now global process underway, that Ireland is part of, that may well affect our corporation tax collection in the future,” the minister said.
“It is however at this point very, very difficult to form a view regarding what that change could be, let alone the magnitude of it. Changes could happen with how companies are taxed globally that may well offset any challenges that we could face as a result of changes that might be made in relation to where tax is levied.”
Budget
IFAC also advised that the government should “be cautious” and stick to the fiscal plan outlined as part of the most recent Stability Programme Update.
The watchdog says that if any additional spending is to be undertaken beyond the planned €2.8 billion of budgetary measures then, “the government should introduce revenue-raising measures to preserve overall sustainability or scale back planned spending increases and tax cuts elsewhere”.
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I’m voting Sinn Féin. And just to debunk the myth about SF voters, I started work at 6am.
@Ebeneezer Goode: not many thumbs up yet Eb, you’re mates will boost the thumbs in about 6 hours, don’t worry!
@Wheresmyjumper: you sound desperate, don’t panic FFG are sinking and you can’t do anything
@Ebeneezer Goode: I’m going to give them a vote this time too. I start at 9 but get up at 6.20 to commute. I would love a family sized apartment near the city instead of a house in the suburbs so I had more free time. I wish our city was planned like a real city.
@Ebeneezer Goode: started work at 6am and commenting on the journal by 6:51am. Your productivity levels must through the roof……
@Ebeneezer Goode: me to on botha counts. I’m voting Sinn Feinn because I think we will get a big global shock financially that will damage our economy. If and when that happens I want a party in government that will prioritise the protection of our society over the gains of global market gamblers.
Fine Gael, Fianna Fail, Labour & The Greens sold us all out for higher interests.
The real shadowy figures.
Never again should we have people in power who will let the destruction that was unfolded on people’s lives here happen while at the same time paying out on market gambling debts of the mega rich.
@Ebeneezer Goode: Same , though I started work at 8am, I had to leave home at 5am. This is because despite the fact I have a well paid job, due to the housing issues FF and FG have done nothing about for my entire lifetime I can not afford to live in Dublin even though I work here… At this stage I will take any change from being governed by FF/FG!
@Ebeneezer Goode: Im voting SF and never got job seeker benefit in my life, the only party who acknowledges low earners….
I’m voting for change .
I’m voting SF.
@Willy Mc Entire: we know. You keep saying. Feel free to explain why they’d change anything.
@Willy Mc Entire:
we know. Is it shinnerbot policy to post this on every article… if you repeat it at nauseam you will get traction and brainwash a few dopes.
Hopefully they pay you well for it, otherwise please get a life and stop posting the same thing over and over. Anyone with a brain will not be influenced by this nonsense.
@Goban Saor: probably because they are not a party of pocket stuffing parasites like FFG are?
@Gus Sheridan: just beholden to a bunch of ex-terrorists and criminals from Belfast.
All politicians want is your vote and when they get in they will do sweet f all for you. They are all the same
@David O Brien: exactly I don’t know why people get so worked up about voting for people who only pretend to care for them
I’m more worried about how much they’ve spent of leaflets. I can hardly open the front door some evenings with the amount of rubbish that has accumulated during the day.
@Σ ΛΛ ΛΛ Θ: collect all the leaflets for each party
Separate them and address them to the parties concerned in an envelope
Post it without any stamp
Let them pay the postage!
If enough people do the same it might just sink in we don’t want their litter
Michael Healy Rae is brilliant. I’d vote for him if I could.
@John Considine: why can’t you…
@John Considine: He’s good entertainment value, a bit like Willie O’Dea. But that’s about as far as it goes.
Any one see michael healy rae on the news last night with the young convicted thug behind him.
I’m voting for Sinn Fein. 220 bucks a week on the dole, how am i suppose to survive on that. I want those on the high income to pay more tax to support people like us who don’t work.
@Daithi De Roiste: you sad person….
@Peter donnelly: I’m very sad, and hungry!
I don’t even particularly think their candidate in my constituency is any good, but nearly sure that SF will get my No1.
If you see an advert by FF/FG on Facebook just report it as “misleading/scam” and if enough do it, they will remove it !
I would genuinely be worried about my job if sinn fein got in. I work in a multinational and if sinn fein got in they would tax them much higher.
Not happy with ff and fg but sinn fein are too extreme.
have your say