More warnings, higher receipts: when will Ireland’s winning streak on tax end?

The Government hasn't – in light of the recent global agreement on tax – changed its estimate of a potential €2 billion loss to the Irish exchequer from the changes. The estimate was drummed up by the Department of Finance two years ago when the OECD forged agreement on the reallocation of taxing rights – phase one of its reform agenda which will allow bigger countries, where multinationals sell more of their products, to take a bigger slice of the tax pie.

At the time we hadn’t banked on a global minimum rate of corporation tax and its corollary – an ending of our much-prized 12.5 per cent rate. It was presumed such an eventuality would entail a much greater loss to the Irish exchequer.

Even though it has come to pass, the Government hasn’t changed its forecast for a €2 billion loss. What should we read into this? That the new 15 per cent global minimum won’t be as damaging as previously thought? Or that predicting the impact of a new headline rate on future investment is too difficult from this vantage?

Exchequer returns this week show corporate tax receipts are running €2 billion above profile this year, and set to net the exchequer a record €13.9 billion for 2021 as a whole. Even with the OECD changes, the Department of Finance is forecasting corporate tax revenue will increase to €14 billion next year and to €15 billion by 2025.

Janet Yellen Day in Dublin sees corporate tax row brushed aside

---

Jim Pettigrew latest in line of British bankers appointed to head Irish lenders

---

Hotel accounts help illustrate success of Covid business supports

---

Spotify’s business model is still all verse, no chorus

---

Remember, the €2 billion hit to our tax base doesn’t mean we’ll fall by €2 billion from this point, just that in 2025 tax receipts will €2 billion lower than they might otherwise have been.

The department warned that a significant chunk of corporate receipts in October were due to larger-than-profiled payments from companies in the life sciences sector, something that would not be repeated. Minister for Finance Paschal Donohoe also cautioned about "the inherent unpredictability and volatility of this revenue stream".

It’s hard to know where all this is going but for the moment we’re in a cosy cycle of being warned about potential losses while netting bigger and bigger gains. It’s a winning streak, but will it last?