British move on Corporation Tax show dangers of planned USC cuts – Doherty
Sinn Féin Finance Spokesperson Pearse Doherty TD has said the announcement of a cut in Corporation Tax in Britain shows how volatile a tax policy built on corporation tax receipts is and that it also shows up the dangers inherent in the commitment to phase out USC.
Deputy Doherty said:
“The news that George Osborne plans to slash Corporation Tax in Britain shows how volatile a tax policy built on corporation tax receipts is. It also, once again, shows just how risky the government commitment to phase out USC really is.
“In the last couple of years, corporation tax receipts here have ballooned without any proper explanation as to why. The Fiscal Council recently pointed out that ‘the concentration of Corporation Tax receipts has risen, with over 40% of Corporation Tax paid by just ten companies in 2015’ and that ‘these revenues are volatile in the short term and uncertain in the longer term since they are dependent on the commercial decisions of a small number of MNCs’.
“The British move could shake up this system where even one company moving could have a huge effect on our budget.
“Relying on exceptional corporation tax receipts as a base for other tax cuts is a dangerous game to play and, as we have seen, we are not the only players on the pitch. Osborne’s move should act as a reality check on both the volatility of corporation tax receipts and on the risky commitment to abolish USC. A sudden drop in corporation tax coupled with a drop in USC receipts could amount to a perfect budgetary storm.
“What Britain or any other country does with its corporation tax policy is out of our hands but we should prepare for sudden changes by having a tax system built on solid reliable receipts instead of on companies that are possibly here today but gone tomorrow.”