Dáil Éireann Debate, Thursday - 4 July 2024
252. Deputy Bernard J. Durkan asked the Minister for Finance if he remains satisfied that our taxation system is sufficiently broadly based to avoid dependency on any one sector to such an extent that it might become a threat to the economy; and if he will make a statement on the matter. [29081/24]
Amharc ar fhreagraMy Department publishes the Annual Taxation Report on an annual basis in order to provide a strategic perspective of the Irish tax system. This allows for the monitoring and identification of developing trends in tax revenue to minimise fiscal vulnerabilities. The latest such report, which was published in August last year, examined the high level of concentration within the corporation tax base, including concentration at a sectoral level: the corporate tax base is highly reliant on a small number of highly profitable companies in a small number of highly profitable sectors.This concentration presents a clear vulnerability to our public finances. Estimates from my Department show that around half of the corporation tax yield in 2023 was ‘windfall’ in nature i.e. not linked to the domestic economy and subject to exceptional potential volatility.Government has acted to mitigate the exposure of our tax base to windfall revenues, through the establishment of two new long-term funds, the Future Ireland Fund and the Infrastructure, Climate and Nature Fund, that will invest these receipts to help fund the response to future structural fiscal challenges that we know are on the horizon.
Ultimately, the best way to ensure the sustainability of the tax base is by continuing to pursue and a balanced and sensible budgetary policy.
