Corporate tax revenue drops to 1999 levels
According to Michael Noonan, the finance minister, the amount raised through corporate tax last year totalled €3.5bn — 10.2% of total tax revenues of €34.2bn.
The amount has not been as low since 1999 when €3.4bn was raised when the corporate tax rate was 28%.
The figures, supplied to Fianna Fáil TD Sean Fleming in a written Dáil response, show the highest ever amount received through corporate tax was €6.6bn in 2006 — 14.7% of the overall tax take.
The current corporate tax rate is 12.5%.
“Our corporate tax rate is regarded as a sacred cow, but the 12.5% rate has only been in place since 2002 and it has never formed part of a long-term economic policy,” Mr Fleming said.
The figures show that in 1985, the corporate tax rate was 50% and generated €276m — 4% of the overall tax take.
The rate has been reduced steadily since then by successive governments.
Mr Fleming pointed out that corporate tax revenues accounted for 10.2% of the tax take last year and the last time the percentage was so low was in 1995, when the corporate tax rate was between 38% and 40%.
“With these figures, it is very good to establish the facts and I don’t believe that there is a direct correlation between the tax rate and the amount of tax received.”
He said he remains in favour of Ireland maintaining the current rate of 12.5%.
“There has been an insular approach adopted in Europe that wants us all to be equally uncompetitive and isn’t aware that there is a competitive global economy out there where corporate tax rates are used as a competitive tool,” Mr Fleming said.
The figures show the take from corporate tax dropped from €3.944bn in 2010 to €3.5bn last year.
In his written response, Mr Noonan said the total tax revenue and corporation tax revenue figures are Revenue “net receipts” figures which can differ from tax revenues reported on an exchequer basis for accounting and timing reasons.
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