Sunday 22 January 2017

Key question is whether tax flood is just temporary or permanent

Seamus Coffey

Published 02/12/2015 | 02:30

We are choosing to increase government debt for tax cuts and expenditure increases that are not necessary to stimulate a rapidly expanding economy but may, it seems, be necessary to win an election. (Stock photo)
We are choosing to increase government debt for tax cuts and expenditure increases that are not necessary to stimulate a rapidly expanding economy but may, it seems, be necessary to win an election. (Stock photo)

Corporation tax receipts for the year came to €4.6bn in 2014. By October this year, receipts had already exceeded that, with the expectation that the full-year receipts will be around €6.5bn with the Budget projecting growth in receipts in 2016 of 10 per cent. In a little over a year, the corporation tax numbers built into the Budget arithmetic have increased by €2bn.

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This unexpected surplus is equivalent to half of all receipts from the Universal Social Charge but a key question is whether these flows are temporary or permanent.

Two weeks ago, the chairman of the Revenue Commissioners, Niall Cody, wrote to the Minister for Finance with some analysis of this unexpected bounty.

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