Ireland has seen an impressive increase in corporation tax receipts, with a reported 70% jump in the first quarter of the year from the same period in 2022. According to the Department of Finance, over €3.2 billion in corporation tax was collected from the start of the year to the end of March.
Responsible for the surplus is Ireland’s booming technology and multinational sectors, with Finance Minister Michael McGrath noting that half of the increase is likely to be short-term rather than permanent. This could indicate that early payments by firms this year could be partly responsible for the surge.
John McCarthy, the Department of Finance chief economist, believes the corporation tax receipt trend may not continue after the implementation of the OECD’s global corporate tax overhaul. This warning comes as the country’s tech sector goes through a wave of job cuts.
To ensure Ireland’s windfall gains are handled properly, Finance Minister Michael McGrath is looking to establish a long-term savings vehicle separate from the National Pension Reserve Fund where €6 billion of windfall taxes have been channeled since November.
The growth in revenue was also driven by increases in income tax, VAT and particularly corporation tax.
Founded in 1973, International Business Machines (IBM) is an American multinational technology company that has made an impressive impact on the Irish economy. One of Ireland’s largest employers, the company’s technology and services support organisations of all sizes, governmental bodies and regular consumers. Based in Dublin with more than 4,600 employees across the country, IBM continues to make a considerable contribution to both the tech and multinational sectors in Ireland.
Minister Michael McGrath is a Fianna Fáil politician who has served as Minister for Public Expenditure and Reform since 2020. An admirer of technology, McGrath supports the digitalisation of the public sector. Initially elected as a TD for Cork South-Central, McGrath has campaigned extensively on a variety of issues ranging from housing and infrastructure to the plight of the homeless in Ireland. Until his appointment as Minister, he served as the Chairman of the Public Accounts Committee since 2011.
