Estimates of Receipts and Expenditure for 2025 published

skrooge said:

I like it but the Pyramids have wide bases, Irish tax receipts do not.

Click to expand...

The concern that Ireland relies on a small number of taxpayers for a significant part of its tax receipts is reasonable. Who are these large taxpayers. Among the largest tax payers in Ireland (2021) are 1 Apple 2 Microsoft 3 Google 4 Pfizer 5 Merck Sharpe and Dohme.

These are among the largest companies in the world, with a good spread between Tech, Pharma, Med Devices and Head Office Services. Much better to be taxing the world's largest companies than, well than anything else.

Of course in time some of these companies will fall away, but Ireland's success in attracting them in the first place suggests that we are well positioned to continue to attract their successors.

The one thing that might stop us is our failing infrastructure. With a successful economy building infrastructure is difficult and expensive. Waiting until our economy decays due to the bottle necks and then building when there are lots of unemployed labourers hanging about is well, nonsense.

Brendan Burgess said:

Here is my summary of the document.

We are spending €10 billion more than we are taking in in tax when you strip out the windfalls. Or a deficit of about €6 billion if you strip out the transfer to the Future Ireland Fund.

Click to expand...

Do you think we are likely to earn a lower return on the Future Ireland Fund than the cost of our debt ?

24601 said:

with the current level of concentration risk, even one or two of them moving their IP back to the US during a Trump presidency could see the public finances under acute pressure.

Click to expand...

Never mind moving IP back to the US....I personally see this as rather low probability event.....dont be under any illusions Ireland plays a key role in ensuring the success of US corporates as they step out on to the world stage.....tax deferral through offshore IP structures in low tax economies (facilitated by Ireland/Lux/Netherlands) is well understood by the US administration (on both sides of the aisle) to be a way that the US advantages its domestic companies to succeed globally. The value in this shows up not in the US treasury but in the 401k accounts of US retirees and in the economic dominance which twins nicely with strategic/military dominance of US companies in every sector you care to look at.

More plausible micro scenarios exist that would have serious budgetary consequences IMO.....for example......the iPhone 17 being a complete sales flop because of some engineering error made in Cupertino design studios which tanks sales & profits of that generation of iPhone.....this sales issue at Apple could genuinely swing us from an annual fiscal surplus into a deficit......another would be Google's search monopoly being unseated by an AI competitor that doesn't have their EMEA HQ in Dublin but Amsterdam instead.......these are just two companies.......and this is what concentration risk looks like.

A global GFC type macro downturn whereby our corporate tax receipts collapse for a couple years....while at the same time our ultra-high earners at FDI companies start getting P45's such that income taxes are collapsing concurrently would be a huge problem now that you've taken so many out of the effective tax net.......especially now in the context of Minister Humphreys coming up the genius fragility idea via enhanced dole payments for high earners....that turning a high tax paying employee into a super high cost welfare recipient is a great idea for a country as operationally leveraged to the global economy as we are!

Dont get me wrong.....I'm not saying that it isn't good we're getting the cash right now or we shouldn't be in the FDI game.....we absolutely should......what we shouldn't be doing is extrapolating out elevated corporate tax and income tax receipts and then basing recurring government expenditures against them.....everybody remembers the post-GFC period when Ireland's cost structure had gotten ahead of itself due a credit fueled boom......and because we dont control out currency we had to endure effectively years of an internal devaluation to bring us back into line.....well right now we are engaged in a fiscal spending boom which is fueling a change in Ireland's cost structure which is making us externally uncompetitive vis a vie the rest of the world........ its the road to hell we are on it right now........make no mistake about it.

Ireland is unknowingly suffering what they call the 'Dutch Disease' -

https://corporatefinanceinstitute.com/resources/economics/dutch-disease/#:~:text=Dutch disease is a concept,a decline in other sectors.

"Dutch disease is a concept that describes an economic phenomenon where the rapid development of one sector of the economy (particularly natural resources) precipitates a decline in other sectors. It is also often characterized by a substantial appreciation of the domestic currency."

As mentioned above we don't have a domestic currency that can appreciate or depreciate relative to our own economic strength or weakness......what does occur, for a country without control of its currency, are changes in our domestic cost structure........internal appreciations in the good times and painful devaluations in costs via economic turmoil (unemployment/emigration) in bad times...which is why we find ourselves with some of the highest prices in Europe for various goods and services even when a significant proportion of the population from an income standpoint look no better off than the average European. It's also why potential domestic export industries find themselves at competitive disadvantages globally relative to where they would be absent the multinationals cost structure & human capital distortions.

So again not disparaging the FDI sector - it is clearly additive and an asset to the economy....in the same way that finding oil fields would be to any other economy....the issue is in the externalities it brings......and in the case of this years budget and recent ones......we are doing exactly what you shouldn't do.........pouring billions into the demand side of the economy using windfall/elevated returns from a relatively small & a potentially highly pro-cyclical sub-sector of that same economy.

It's a recipe for outrageous volatility.

Ever hear of the 6ft man that drowned in a river that was, on average, 2ft deep?

The Irish economy is that man right now.....maybe we get away with it, maybe we don't. The trick, in prudent economic management, is not to do things that you need to 'get away with'!

I can't follow this story... were these amounts factored into the numbers on Budget Day or does this go beyond the spending announced that day?

Estimates for Total current receipts in 2024 were 106,855 (Actual: 108,025) and 2025 was 109,130. Half way through the year and Revenue is 10% higher vs the same point in 2024. If I apply the 2024 trend for H2 to the 2025 figures, we are on track to generate c. 119,415 (9.4% higher than estimated). Absolutely incredible performance!

There are no corresponding figures for expenditure but estimates suggest an increase of 5.9% over Budget 2025 estimates.



*these figures are the relative performance of each line vs. 2024 on a cumulative basis i.e. total tax take is 10.54% greater than all tax received up to June 2024. Source: https://databank.finance.gov.ie/

Note: Impact of Training and Employment Levy and Local Property Tax are negligible in absolute terms.

Aside from impact of Corporation Tax (tariff effects), massive increase in "other property related taxes".

It's really feeling like 2008.
Some very prescient posts from last year.

Oh, and @cremeegg, the Pyramids are built on limestone bedrock.

Itchy said:

Aside from impact of Corporation Tax (tariff effects), massive increase in "other property related taxes".

Click to expand...

Not sure what those "other property-related taxes are" but they do seem to be highly volatile, bouncing around wildly from month to month.

However, while some of the the percentage increase figures are impressive, I suspect the actual monetary amount involved are very small, and that the massive increase in these taxes isn't going to have a material imact on the budget.