My Department has been active in assessing the emerging impacts of AI on the Irish labour market, household income, and income tax revenues through cross-departmental research.
This research has found that Ireland’s labour market is marginally more exposed to AI than the advanced economy average and has identified sectors such as ‘Financial and Insurance’ and ‘Information and Communication’ as the most exposed. Further analysis by the Department has found that ‘AI exposed’ sectors have experienced weaker employment growth since 2023 than less exposed sectors, with the effects most pronounced among younger workers.
Joint research published this year by the Department and the ESRI found that AI adoption could lead to increases or decreases in income tax revenue in the short-term, depending on the potential balance between job displacement and productivity-driven wage increases.
The Department forecasts corporation tax receipts based on macroeconomic projections for corporate profitability, supplemented by advice on other factors that can impact on the yield e.g. once-off payments, sector specific factors, and the (potential) outcome of cross-border tax disputes.
The development and adoption of Artificial Intelligence (AI) is rapidly evolving and its long-term impacts on Ireland’s labour market, corporate profitability, and overall productivity remain highly uncertain. As such, the effectiveness of directly modelling the impacts of AI adoption on corporate profitability would be limited.
That said, the exposure of our public finances to volatile corporation tax receipts remains a key risk. In recognition of this, the Government has adopted a fiscal strategy based on three pillars of sustainability, resilience and readiness, as outlined in the Medium-term Fiscal and Structural
plan. As part of that strategy, we are setting aside a portion of these potentially transitory revenues in the Future Ireland Fund to prepare for future challenges.
At the same time, AI presents significant opportunities to enhance productivity and strengthen our competitiveness. Our new National Digital and AI Strategy, published in February 2026, sets out a whole-of-Government approach to drive the adoption of trustworthy, person-centred AI for our collective good. That means equipping our workforce with cutting edge skills, strengthening digital literacy and public trust, and helping workers navigate potential job displacement through agile and accessible upskilling and reskilling opportunities.
