Irish Daily Mail

Donohoe: New tax rules will lead to revenue drop of €500m a year

- By Dominic McGrath

IRELAND’S corporatio­n tax revenue will fall by €500million per year if the country is forced to adopt new rules, the Finance Minister has said.

‘By the mid-2020s, we are expecting that our corporate tax collection will be €1.5billion to €2billion lower than it otherwise would have been,’ said Paschal Donohoe.

Earlier this year, G7 countries signed up to a corporatio­n tax rate of at least 15%, and the Organisati­on for Economic Co-operation and Developmen­t, of which Ireland is a member, is trying to work out a similar agreement. Ireland was one of only five nations not to sign up to the OECD agreement, which is backed by more than 130 countries, as well as the EU.

Last month, Mr Donohoe vowed to defend Ireland’s 12.5% corporatio­n tax at the OECD talks, and said he hoped the Government would be clearer on the OECD tax agreement by October.

A new report on tax, published by the Department of Finance on Tuesday, suggests that Ireland is too reliant on a small number of multinatio­nals for its tax revenue.

Peter Vale, tax partner at consultant­s Grant Thornton Ireland, said the Department of Finance report shows Ireland’s tax receipts have been strong, despite the pandemic. However, he acknowledg­ed that broadening the tax base may be politicall­y unpopular.

‘While a broadening of the income tax base has been noted before, it is likely to be politicall­y challengin­g as it would bring more taxpayers within the tax net. As a result, despite its merits, there has been little action to broaden the tax base in recent years,’ he said.

 ??  ?? Stance: Paschal Donohoe
Stance: Paschal Donohoe

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