It warns that Ireland has 'little margin of error' in dealing with cost-of-living crisis.
As much as €9 billion or 60% of the Government’s corporate tax take may be “temporary”, meaning it cannot be counted on in the future, the Irish Fiscal Advisory Council (Ifac) has said.
In its latest report, the financial watchdog said the Government’s over-reliance on volatile and vulnerable corporation tax receipts posed a significant threat to the public finances and needed to be reduced as a matter of urgency.
This means the money couldn't be explained by the performance of the domestic economy and it's an unreliable source of income for the state.
It suggested the Government could unwind this over-reliance by rebuilding the so-called rainy day fund or by paying down debt.
The Government have been warned to reduce our reliance on corporation tax and find other revenue raising taxes that are more consistent.
The chairman of IFAC Sebastian Barnes says other ways of generating tax need to be explored while phasing out our dependence on corporations:
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