Irish tax revenues exceeded 2015 target

The Irish fiscal deficit has been reduced by €5.2 billion after tax revenues received by the Government were greater than expected, the latest Exchequer Returns show.

The country's deficit fell to approximately €3.4 billion, down from the €8.6 billion level it had been at in 2014.

Above target

A rise of 10.5 per cent in year-on-year tax revenue was collected in 2015, which meant they were 7.8 per cent above target, with corporation tax accounting for 70 per cent.

Government investment agency IDA Ireland chief executive, Martin Shanahan, said that the rise in corporation tax receipts reflects an increase in investment activity.

He went on to announce that foreign direct investment (FDI) in 2015 had led to a 66 per cent year-on-year increase in the number of jobs that had been created.

Very strong pipeline

Shanahan explained: "There has been a very strong pipeline of new investments over the past 18 months and we can see from [these] figures that multinationals are adding headcount at a high rate, which suggests a strong uplift in activity."

The stability of the Irish tax regime may be furthered by the introduction of a BEPS-compliant knowledge development box, which includes a corporation tax rate for intellectual property set at 6.25 per cent.

Shanahan concluded: "However, Ireland needs to keep its tax offering under review, including personal tax rates, to ensure that we remain competitive in the international environment.”