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Press Release

Summer Economic Statement

The proposed Budget 2024 includes a tax package of €1.1 billion, primarily aimed at addressing the issue of workers moving into higher tax brackets due to inflation (known as fiscal drag). However, this tax package is significantly overshadowed by a spending increase of €5.3 billion, resulting in an overall budget of €6.4 billion.

Interestingly, despite the favourable financial position of the government and excluding one-time supports from the previous year, the core Budget 2024 is approximately €0.5 billion lower than its 2023 counterpart.

To address concerns about potential volatility in certain key taxes, particularly due to the concentration of corporate tax revenues among a small group of multinational companies, the Minister plans to establish a long-term savings fund funded by revenue windfalls.

Regarding income tax, it's worth noting that 25% of workers contribute 85% of the total income tax receipts. Similarly, the reliance on a small number of taxpayers is a significant concern for corporate tax, as 60% of corporate tax revenues come from just 10 multinational corporations. The top three of these are estimated to contribute 33% of the total corporation tax collected. Ireland's reliance on corporate tax receipts is relatively high at 25% of the total tax revenue, compared to other jurisdictions. The Minister also acknowledges the potential threat posed by future OECD tax reforms, which could reduce Ireland's share of the global tax revenue.

Additionally, it is important to mention that €2.25 billion of the "windfall" corporate tax receipts will be allocated for capital investment and infrastructure projects over the next three years.

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