Dáil Éireann Debate, Tuesday - 29 September 2026
164. Deputy Richard Boyd Barrett asked the Tánaiste and Minister for Finance if he is aware that workers on average pay a greater proportion of their wage in income related taxes than businesses pay in corporate taxes; and his plans to ensure that businesses pay at least the same proportion of their profits in taxes as the ordinary worker. [68648/26]
Amharc ar fhreagraThe Deputy is drawing a comparison between the Corporation Tax and Income Tax regimes which, as he will be aware, are designed to tax different entities and circumstances.
Corporation Tax is paid directly by the company on its profits, and the activities of the company also support the payment of income taxes in the form of PAYE income tax and social insurance on employees’ wages and the taxation of dividends paid to shareholders from net profits.
Ireland’s Corporation Tax regime has been built on certainty and predictability, and the 12.5 per cent headline rate on trading income has been a cornerstone of that regime for over 20 years. This stability has enabled companies to plan long-term investments in Ireland, generating employment and increasing economic activity.
Ireland’s Corporation Tax regime has been undergoing significant reform in recent years, as part of a global process of Corporation Tax reform. This has included the transposition of the Anti-Tax Avoidance Directives and, in 2023, the implementation of the Pillar Two global minimum effective tax rate of 15 per cent for large corporate groups with annual global revenues in excess of €750m.
While it is possible that imposing further increased taxation on profitable companies could lead to theoretical gains, it could also potentially lead to lower levels of economic activity and/or to companies passing the additional tax burden onto their staff, customers, suppliers and/or investors.
I am conscious of the average tax rates paid by individuals, and details of effective tax rates for a number of different household types across a range of incomes are published each year in the Budget Tax Policy Changes publication. As the Deputy will be aware, the ‘Programme for Government 2025: Securing Ireland’s Future’, contains specific undertakings with regard to personal taxation, it commits to “implementing progressive changes in taxation if the economy remains strong, including indexing credits and bands to prevent an increase in the real burden of Income Tax.”
