Latest news with #public expenditure
Irish Times
15-07-2025
- Business
- Irish Times
Rein in spending to cut reliance on ‘volatile' corporation tax, Ibec says
Business lobbying group Ibec has called on the Government to reduce the growth of public expenditure in an effort to reduce the State's reliance on 'volatile' corporate profit tax receipts. The lobbying group said the positive status of the State's headline economic markers are largely funded by corporate tax, which its chief economist Gerard Brady said could be 'volatile' over the coming years. Ibec suggested a maximum net spend on budget day of €3 billion, with increased exchequer spending offset by fiscal drag and €1.3 billion made up of commitments under the National Development Plan. [ Ireland's corporate tax receipts hit €156bn Opens in new window ] Ibec pointed to figures showing that, should Ireland collect a level of corporate profit tax comparable to similar economies, every worker in the country would have to pay an additional €4,000 in taxes to make up the State's current tax revenue. In light of the reliance of the State's balance sheet on corporation tax, Ibec called for the Government to rein in spending increases in the coming budgets to 'return to a balance of income over expenditure, were our corporate tax receipts to be realigned with other mid-sized globalised economies'. The lobbying group said the gap stands at around €5 billion, and Mr Brady noted that recent US policy is adding to the economy's exposure to volatility with the State at risk of being left 'very short' on tax receipts should that risk materialise. Mr Brady said the Government could 'correct, fairly painlessly, the underlying budget deficit' over a number of years and would avoid 'more painful' measures in the future. He said the business community's biggest concern is of a 'sharp correction' in Government policy should that 'volatility be materialised'. Asked whether it supported Government indications that cost-of-living measures would not be needed in the Budget, Fergal O'Brien, Ibec's head of lobbying and influence, said the group was against 'universal supports'. 'We shouldn't be doing across-the-board, universal supports – it is just really bad economic policy,' Mr O'Brien said, urging the State to target distressed households and reduce the cost of business. [ The EU/US tariff deal: The good, the bad and the potentially ugly for Ireland Opens in new window ] Ibec also called for 'targeted supports' for industries hardest hit by US import tariffs, such as the the spirits industry, where Ibec noted more than 90 per cent of distilleries had paused or cut back production. Mr Brady said that some sectors would be placed under 'existential pressure' should the level of tariffs rest at 20 or 30 per cent. The lobbying group noted that their members have been 'very vocal' in raising 'a lot of concerns' about the EU's countermeasures in response to US tariffs. One measure Ibec suggested to reduce costs to businesses and households is reducing the fixed cost component on Irish energy bills through a 'strategic annual subvention'. The group also suggested indexing the top tax band and income tax credits to wage growth at a cost of €440 million and €240 million respectively. Amid economic turmoil, Ibec called on the Government not to reduce infrastructural spending, and to introduce a set of spending targets in the upcoming 2026-2029 medium-term fiscal plan. These include a fiscal investment target of 5 per cent of gross national income (GNI), and working towards increasing public investment in research and innovation to 1 per cent of GNI by 2035. To encourage homebuilding, Ibec called for the reduction of VAT to 5 per cent and the removal of Government levies on new-build apartments – which it said would 'improve the viability of apartment building'.
Irish Times
10-07-2025
- Business
- Irish Times
Department of Public Expenditure faces ‘embarrassing' €700,000 Revenue bill after payroll errors
The Department of Public Expenditure is facing having to pay about €700,000 in interest to the Revenue Commissioners over delays and inaccuracies in its tax deductions. Members of the Dáil Public Accounts Committee queried whether the issue was 'embarrassing' for the department which oversees public-sector efficiency. The secretary general of the department, David Moloney, told the committee on Thursday that there had been significant errors and he was not happy about the situation. The issue relates to deductions from the retirement benefits of former public service staff with high-value pensions worth more than €2 million. In such cases the tax is paid by the pension administrator, who recoups the money by reducing the benefits over a 20-year period. The committee heard that a review of about 20 cases by the Comptroller and Auditor General , Seamus McCarthy, between 2015 and 2023 found that while deductions had, correctly, been made from the pensions, in only six instances had the money actually been paid over to the Revenue. READ MORE Deductions worth about €2.3 million had remained on the books of the department. A subsequent Revenue sample audit this year identified other issues regarding taxation of high-value pensions. Bernie Kelly, chief executive of the National Shared Service Office, said a review had identified 23 cases where chargeable excess tax (CET) had not been calculated correctly, of which 19 had been validated. She said this had generated a liability of €1.4 million. Ms Kelly told Fine Gael TD James Geoghegan that about €230,000 in interest payments would be triggered on foot of the liability in the case where the CET had been incorrectly calculated. The department had earlier told the committee that more than €468,744 in interest payments had been paid in relation to the earlier cases where the tax had been correctly calculated but the money was not passed on the Revenue. Mr Moloney said it would be a matter for the Revenue Commissioners as to whether further penalties would be applied in addition to the interest. Mr Geoghegan asked Mr Moloney whether this was 'embarrassing' for the Department of Public Expenditure to have to make interest payments to the Revenue Commissioners for the late payment of taxes when it held other departments to account over their spending. Mr Moloney said he was not happy about the situation and that his department strived to pay people correctly.
