Wednesday will be a big day for the public finances, with the key November tax returns due to be published. All eyes will be on the corporate tax haul, with Davy estimating that the take in this month alone could be close to €10 billion.
This compares to about €7.75 billion last year when the once-off boost from the receipt of money from the Apple tax judgment is excluded.
The brokers note that the June corporate tax returns were strong, and that this is the traditional indicator for companies which have a December year-end and pay most of their tax in November.
Profit trends in the few big players that pay tax here remain strong.
The healthy receipts are likely to guarantee another budget surplus this year, despite significant overspending, which is likely to come close to €4 billion above budget.
The Department of Finance expects further corporate tax growth next year, as the benefit of the 15 per cent rate imposed on the biggest companies starts to kick in.
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The tax inflow will increase pressure on finance Ministers Jack Chambers and Simon Harris to ease up on spending control next year if departments again run in advance of budget. Their pledges not to do so will be tested.
It will also increase demands from the Opposition for more help for households, at each and every turn.
It is all a long way from the fears back in April when US president Donald Trump first announced his tariff plan, that the best days of corporate tax might be behind us. But the renewed inflow of tax, mainly from US companies, could again rouse the White House to renew its focus on the Republic and the companies that operate here.
The old story about the State’s vulnerability on the tax front remains, with revenues increasingly reliant on a few very big companies. Of interest in this context will also be the key VAT and income tax returns in November. If somewhat slower growth in the Irish economy starts to show up here, our reliance on corporation tax is set to grow yet further.
