Nothing responsible about over-reliance on volatile Corporation Tax take – Tóibín
Sinn Féin Finance Spokesperson Peadar Tóibín TD has said that while the good exchequer figures are to be welcomed there is now a real question about whether the figures represent a stable and sustainable improvement. He said figures released to him by the Revenue Commissioners show a serious over dependence on a small number of companies with the top 140 companies paying nearly €3.5bn in tax in 2014.
“The exchequer figures apparently show that the economy is growing but alarm bells will be going off in many quarters with the Fiscal Advisory Council stating that the use of unexpected revenues like increases in Corporation Tax has worrying echoes of past fiscal policy errors made in Ireland during the boom. The EU Commission has said that the growth in investment in the second half of 2015 is “explained by a single transaction in intellectual property by one of the multinationals established in Ireland”.
“Furthermore, the Fiscal Advisory Council pointed out that the fiscal forecasts in Budget 2016 do not provide a meaningful anchor for medium-term budgetary planning. A key weakness of fiscal policy making in Ireland prior to the crisis was that the budgetary process paid insufficient attention to medium-term expenditure management.
“Also, based on data from the Revenue Commissioners, we can see the concentration of corporate tax receipts among large multi nationals, with 140 companies making up 68% of the €4.6 billion Corporate Tax take in 2014. This has echoes of our over reliance on the construction sector during the boom and unfortunately we all know what happened there.
“Add to this the fact that 90% of Irish exports are from the FDI sector and the fact that the big increase in exchequer receipts occurs with relatively flat jobs growth. The truth is the Irish economy is shockingly unbalanced. This imbalance exposes the economy to future shocks such as exchange rate changes, altering competitive advantages or the decisions of just a handful of mobile FDI firms. To allow this imbalance to continue and indeed to shift the funding of the state towards that imbalance is imprudent and reckless and gives a lie to the promises of stability made by Fine Gael and Labour.
“The Government stop the lie that they can cut taxes without reducing the provision of public services, given the increasing demands in terms of demographics over the coming years. It needs to get real with regards growing our dangerously fragile indigenous export sector.
“While much of the country is still reeling from the last crash this government is again shifting the tax base from personal taxation to a unpredictable volatile sector.”