Future tax revenues are at risk as Ireland relies on high-wage workers from multinationals, the Treasury Department has warned. The surge in income tax revenues last year (a €3.7 billion, or 16 percent increase over pre-pandemic levels) was largely due to wage increases rather than job creation, the State Department said in its annual tax report. increase. Pandemic prevention sectors such as IT and pharmaceuticals drove strong tax revenues last year and will continue through 2022. However, governments are increasingly concerned not only about the loss of corporate tax revenues as a result of global tax reform, but also about the loss of jobs. Migration of high-income people from Ireland. “In the event of a shock to the multinational sector, this would also result in large losses in income tax receipts. Risk is a major vulnerability for public finances.” Last year’s OECD agreement – which taxed 15% of the global income of large companies and transferred the taxing power to the country of their turnover – would make Ireland a legal entity. Potential loss of tax revenues of around €2 billion per year. 2024. If that or the economic slowdown forces multinational investment into Ireland to decline, it could result in “very large losses in income tax (and PRSI) receipts,” the tax report says. . Corporate tax revenues recorded the largest increase last year, 41 percent higher than in 2019, or €4.4 billion. In 2022, it is expected to surpass last year’s total of €15.3 billion. The Irish Fiscal Advisory Board said this week that the overall tax burden could be her 3.5 billion euros, higher than the estimate the government made in its economic statement a few weeks ago over the summer. But he said that without the “excessive” corporate tax (a sum that cannot be justified by the performance of the domestic economy), this year’s budget would be in the red, not the surplus. He warned to put surplus income into a rainy day fund or a new pension provident fund to pay for the burgeoning costs of being able to continue. By the end of the decade, she will contribute $7 billion to spending on pensions and other age-related public services.
