Fine Gael Finance Minister Paschal Donohoe has said that Ireland’s corporate tax revenue will begin to decline after 2023.
Speaking on Thursday to RTÉ radio, the Minister said Ireland would “lose money” on the new OECD arrangement, whereby Ireland’s famous 12.5% corporation tax would be raised to 15%.
“If you look at where we are with this rate, overall Ireland will lose money and nobody knows this better than me,” he said.
“We’ll lose money because of two things happening. The first thing we will lose money from over time will be the full implementation of the global tax reform package.”
He added that this was not just the reformed rate of tax, but “the change that will happen regarding where tax is paid.”
“Secondly, many of the large tax payers are in a position of very high profitability due to other things that have happened in the global economy.
“And we cannot, nor should we expect, that to continue. So we will get to a point where our corporate tax revenue – and I’ve been saying this in particular since 2018 – will come down,” he said.
Previously in 2017, Fine Gael leader Leo Varadkar said that changing Ireland’s 12.5% corporation tax rate would “damage our country, its employment prospects, and its economy.”
All government parties at the last election assured voters that they favoured a retention of the 12.5% rate.
As the government moves today to decide on Ireland’s tax rate, it’s worth recalling that in 2020 all government parties explicitly assured voters they would retain Ireland’s 12.5% corporate tax regime if elected.#gripthttps://t.co/G9wc6oSsDV
— gript (@griptmedia) October 7, 2021
Additionally, an opinion poll around the time of the agreement found that 3 out of 4 voters were in favour of keeping the country’s 12.5% rate.
Paschal Donohoe looks set to ask Cabinet colleagues to give clearance for Ireland to sign up to an OECD deal that would mean the end of Ireland’s 12.5 per cent tax rate and its replacement with a rate of 15 per cent.https://t.co/O91zOWv2HF
— The Irish Times (@IrishTimes) October 7, 2021