Finance Minister Dismisses Claims That Increased Spending In The Budget Is Coming From Corporate Tax

Tuesday, 5 July 2022 10:36

By Caoimhe Harney

In total, €6.7bn extra will be spent next year, with €2.7bn available for new measures.

The Finance Minister has disputed claims the government are relying on corporate tax receipts to increase spending in the budget, and said all of the additional money collected from the tax this year has not been spent so far.

In total, the government has collected 3 billion Euro to date, from the tax on large companies based in Ireland.

Meanwhile, The Irish Fiscal Advisory Council (IFAC) has said strong corporation taxes “should not be relied on to fund permanent spending increases."

In total, €6.7bn extra will be spent next year, with €2.7bn available for new measures.

It was announced yesterday that the budget will also be held two weeks early on September 27th.

Minister Paschal Donohoe has said measures to help with the cost of living crisis in the upcoming budget have to be universal.

He was speaking following publication of the Summer Economic Statement, which will see a 6.5% increase in core Government spending this year.

However, IFAC the budgetary watchdog posted a number of tweets following the publication of the Summer Economic Statement .

It said Budget 2023 “involves a delicate balancing act in protecting the economy and poorer households, while avoiding adding to inflation through second-round effects”.

It said that “overreliance on corporation tax should be reduced through contributions to the Rainy Day Fund or a new pension reserve fund” and warned that “uncertainty about the economy remains very high."

The Government today published its Summer Economic Statement (https://t.co/tWnXrC3puv) ahead of Budget 2023 on 27 September and the Fiscal Monitor for June (https://t.co/qXuO201vWF). Strong tax revenues have led to a new official projection for a budget surplus in 2022. pic.twitter.com/Z7OjLI8e4L
— Irish Fiscal Advisory Council (@fiscalcouncil) July 4, 2022