Secretary general Derek Moran and a delegation of top civil servants from the department were appearing before the Public Accounts Committee where they were grilled about the surprising tax revenue figures.
Under questioning from Independent TD Shane Ross, Mr Moran conceded the department does not have any “real-time” information as to why the massive spike in corporation tax revenues occurred.
“Consequently, the department is flying blind on that one,” Mr Moran said.
It also emerged at the meeting that much of the information the department rely upon are basically self-assessments from the multi-national corporations.
said: “I am quite concerned about this because it is quite important. The Department of Finance is in the dark about an incredibly significant figure and an extraordinary thing that is happening in the economy. It really does not know why it happened and it has a lot of work to do, which is highly worrying.
“This means one cannot for a moment believe any assessment as to whether this is or is not permanent income because the department itself does not know from where it is coming or why it is coming.”
The department’s chief economist, John McCarthy, when pressed as to how many firms were responsible for the spike in revenues, admitted: “A significant part of the overshoot is down to a very small number of firms.”
Mr McCarthy said there has been an increase in employment in the multinational sector, broadly based, but added: “It is probably fair to say that the profit share within that sector has probably risen faster than the wage share.”
The latest exchequer figures released this week showed tax revenues are running €3bn ahead of target, €2.3bn of which were better than expected corporation tax revenues.
PAC chairman John McGuinness said he was deeply concerned about the emergence of another “bubble”.
He was also deeply critical of the department’s lack of real time information as to what is driving the exceptional figures. “I wouldn’t be satisfied that the department is control of its very important brief and they should have been able to answer questions, but they weren’t. It is deeply concerning.”
During the hearing, the officials sought to draw some comfort from a letter from the Revenue Commissioners that the vast majority of the corporation tax revenue is likely to recur next year, but Mr Ross and Mr McGuinness have urged caution on such assurances.