10 companies paid 40% of the government’s corporate tax windfall last year
Corporation tax is now the government’s third largest tax channel, accounting for nearly €11 billion or 19% of all revenue last year, according to the Revenue Commissioners’ latest annual report.
However, the report pointed out that 77% of corporate tax revenue came from foreign-owned companies or multinationals and 40% from just 10 large companies.
Corporate tax revenues have jumped over the past four years with the increase linked to the global crackdown on multinational tax avoidance and the relocation of assets such as intellectual property (IP) here.
The reliance of the state on such a small number of companies, however, makes the tax base very unpredictable and vulnerable to shocks.
The government has been repeatedly warned not to use the additional revenue for current expenditure.
Revenue Chairman Niall Cody said he was releasing the agency’s annual report amid exceptional circumstances related to the Covid-19 pandemic.
“The pandemic has presented and continues to present significant challenges for the economy, businesses and workers, as well as an impact on key elements of the role of the tax authorities as tax and customs administration,” he said. he declares.
As of June 25, Revenue said more than 62,800 employers had signed up for the government’s Temporary Wage Subsidy (TWSS) scheme, which is administered by Revenue, with around 405,000 employees supported.
The cumulative value of payments made to employers under this scheme amounts to nearly 1.7 billion euros, he said.
Commenting on Revenue’s support for businesses during the crisis, Mr Cody said that “we have taken a series of measures to help businesses facing cash flow and business difficulties, including suspending all debt collection and charging interest overdue for VAT periods covering the first six months of 2020 and PAYE (employer) liabilities for February, March, April, May and June.
He said these deferred payments, which amount to €1.5 billion until the end of May, have provided vital liquidity support for the SMEs and large companies affected.
As part of the debt warehouse arrangement, announced by the government in May, the Inland Revenue has also deferred VAT and PAYE (employer) obligations where a business is unable to trade or is subject to to trade restrictions due to Covid-19 restrictions.
The IRS report shows it collected total gross revenue of €84.2 billion, including nearly €16 billion in non-treasury revenue collected on behalf of other government departments and agencies.
Net Treasury revenue for last year totaled €58.3 billion, up 6.7% or €3.7 billion from 2018, with the largest tax revenue coming from the income tax (39% or 22.9 billion euros), VAT (26% or 15.1 billion euros). billion) and corporation tax (19% or 10.9 billion euros).
The agency said it carried out more than 566,000 compliance interventions, earning 548 million euros in tax interest and penalties, while settling 127 tax evasion cases with a return of 129 million euros in taxes. , interest and penalties.
The fight against tax evasion and illegal smuggling resulted in the seizure of illegal drugs worth more than 23.5 million euros and illicit tobacco products worth more than 10.6 million euro, he said.
On Brexit, he said he was continuing “thorough and detailed Brexit preparedness and contingency planning”, engaging across all relevant government departments and agencies and with over 100,000 businesses.
Mr Cody said: ‘Revenue continues to be heavily focused on supporting and helping businesses to be ready for the significant changes and impacts of the UK’s exit from the EU, which will take full effect in just six months.
“Companies really need to make sure they use the little time left before the end of the year to be ready for change,” he warned.