Paschal Donohoe says agreement on global corporate tax rate still uncertain

ireland
Paschal Donohoe said the catalysts for corporate tax change had been 'supercharged' by the pandemic. Photo: PA Media
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The Minister for Finance has said it remains to be seen if states participating in the Organisation for Economic Cooperation and Development's (OECD) corporate tax talks can agree on a global minimum rate.

A call on Monday for such a rate by US treasury secretary Janet Yellen was quickly backed by Germany and France.

Paschal Donohoe said the catalysts for corporate tax change had been “supercharged” by the Covid-19 pandemic, but that smaller countries like Ireland would voice their concerns at the OECD.

“The focus on a global minimum tax rate is a prospect that I do have reservations about ... on what would be the impact of that on the competitiveness for smaller and medium-sized economies that do have lower rates of corporate taxation and use that as part of their overall competitive model,” Mr Donohoe told a news conference.

Exchequer figures

Along with the Minister for Public Expenditure, Michael McGrath, Mr Donohoe also outlined the Exchequer figures today for Q1 2021.

Some of the key figures included:

  • AT receipts to the end of March were up by €350 million, or 8.4 per cent reflecting the severity of the spring 2020 lockdown;
  • Income tax receipts remain resilient, up by 4 per cent, on Q1 2020;
  • Total gross voted expenditure to the end of March 2021 amounted to €19.5 billion; €2.5 billion, or over 14 per cent, ahead on the same period in 2020;
  • Gross spending by the Department of Employment Affairs and Social Protection up €2.7 billion year-on-year;
  • The 12-month rolling Exchequer deficit stands at just under €14 billion.

Mr Donohoe said: “Today’s figures show the significant level of support that continues to be provided by Government.

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“More than €2.5 billion additional funding has been spent by the Department of Employment Affairs and Social Protection alone over the last three months compared to last year.

“Together with the range of other supports available to people and businesses, including the Covid Restrictions Support Scheme, the impact on the public finances has been severe.”

He said while the cost to the Exchequer has been substantial, there are grounds for optimism. Donohoe said the tax figures show, businesses and consumers have adapted.

He added: “The economic impact of the current set of restrictions is not as severe as last year, as companies innovate and consumers respond. This shows the fundamental strengths of our economy and business sector and bodes well for our recovery over the coming months.”

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