Summer Economic Statement

Press release

Summer Economic Statement

05 Jul 2023

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.

Experts / Authors

Sarah Meredith

Sarah joined Grant Thornton in 2010 having worked in a professional services firm for over four years. Sarah has extensive international tax experience and is involved in a significant number of group restructuring and acquisition projects for large clients. Sarah advises on a wide range of issues to include transfer pricing, interest limitation rules and both inward and outward bound investment from Ireland.

Peter Vale

Peter has experience in international corporate tax structuring including; financing structures, company migrations and international reorganisations. He has advised clients on the tax aspects of property investments, both domestic and international.

Sasha Kerins

Sasha is a Tax partner advising international businesses on corporate re-organisations, structuring and acquisitions/disposals, as well as supporting her clients around the key day-to-day tax requirements for their businesses.