Irish Fiscal Advisory Council
@fiscalcouncil.bsky.social
Ireland's budgetary watchdog
7/7 Ireland’s corporation taxes could become even more concentrated. Any future large profits from artificial intelligence and weight-loss or diabetes drugs will likely accrue to a small number of very big firms. This increases the risk of sudden swings (up or down) in revenue.
November 12, 2025 at 9:26 AM
7/7 Ireland’s corporation taxes could become even more concentrated. Any future large profits from artificial intelligence and weight-loss or diabetes drugs will likely accrue to a small number of very big firms. This increases the risk of sudden swings (up or down) in revenue.
6/7 On the downside, the pharma sector could face tariffs. In addition, there are also policies in motion to reduce drug prices in the US. For the tech sector, the longer-term prospects depend on whether large investments in AI generate higher profits, which is still uncertain.
November 12, 2025 at 9:26 AM
6/7 On the downside, the pharma sector could face tariffs. In addition, there are also policies in motion to reduce drug prices in the US. For the tech sector, the longer-term prospects depend on whether large investments in AI generate higher profits, which is still uncertain.
5/7 In addition, Ireland has also introduced a 15% minimum effective tax rate for large firms, as part of the OECD’s Pillar II reforms. This will yield additional revenue from mid-2026.
November 12, 2025 at 9:26 AM
5/7 In addition, Ireland has also introduced a 15% minimum effective tax rate for large firms, as part of the OECD’s Pillar II reforms. This will yield additional revenue from mid-2026.
4/7 On the upside, profits in the tech sector are likely to increase further, aided by advances in AI and growing demand for their products and services. In the pharma sector, Ireland is likely to benefit from a surge in demand for weight-loss and diabetes medicines.
November 12, 2025 at 9:25 AM
4/7 On the upside, profits in the tech sector are likely to increase further, aided by advances in AI and growing demand for their products and services. In the pharma sector, Ireland is likely to benefit from a surge in demand for weight-loss and diabetes medicines.
3/7 Ireland’s corporation tax revenues have become more risky. That is, future receipts could be much higher or lower than current levels.
November 12, 2025 at 9:25 AM
3/7 Ireland’s corporation tax revenues have become more risky. That is, future receipts could be much higher or lower than current levels.
2/7 Ireland’s corporation tax revenues could be even higher than they might otherwise have been in the short term. This is because one large pharma group frontloaded some exports to the US ahead of the expected tariffs.
November 12, 2025 at 9:25 AM
2/7 Ireland’s corporation tax revenues could be even higher than they might otherwise have been in the short term. This is because one large pharma group frontloaded some exports to the US ahead of the expected tariffs.
4/4 Current spending is growing at a fast pace in 2025. Growth in current spending so far this year is 6%, ahead of the 3.3% assumed in Budget 2026. Most areas of spending are growing quickly, but spending in Education, Children and Justice is growing particularly fast.
November 5, 2025 at 6:04 PM
4/4 Current spending is growing at a fast pace in 2025. Growth in current spending so far this year is 6%, ahead of the 3.3% assumed in Budget 2026. Most areas of spending are growing quickly, but spending in Education, Children and Justice is growing particularly fast.
3/4 Corporation tax continues to be volatile. Monthly receipts for October are up €0.7 billion on last year. For the year-to-date, corporation tax, excluding CJEU receipts, are up €1.1 billion, or 6.3%. Continued strength is expected for corporation tax in the near term.
November 5, 2025 at 6:04 PM
3/4 Corporation tax continues to be volatile. Monthly receipts for October are up €0.7 billion on last year. For the year-to-date, corporation tax, excluding CJEU receipts, are up €1.1 billion, or 6.3%. Continued strength is expected for corporation tax in the near term.
2/4 Underlying revenue in 2025 has grown faster than forecast in Budget 2025. This faster growth is seen across the key tax headings, with the exception of VAT, which is below forecast.
November 5, 2025 at 6:03 PM
2/4 Underlying revenue in 2025 has grown faster than forecast in Budget 2025. This faster growth is seen across the key tax headings, with the exception of VAT, which is below forecast.
4/4 By identifying future pressures early, we can take proactive steps to address them. Now is a key opportunity to make substantial contributions to government savings funds. The more we save today, the better prepared we are for future challenges.
November 5, 2025 at 2:55 PM
4/4 By identifying future pressures early, we can take proactive steps to address them. Now is a key opportunity to make substantial contributions to government savings funds. The more we save today, the better prepared we are for future challenges.
3/4 These changes will likely have significant implications for the public finances. An ageing population and climate change will both put upward pressure on spending. Revenue growth is likely to be slower as economic growth moderates and the population ages.
November 5, 2025 at 2:54 PM
3/4 These changes will likely have significant implications for the public finances. An ageing population and climate change will both put upward pressure on spending. Revenue growth is likely to be slower as economic growth moderates and the population ages.
2/4 There are some key positive developments that are likely over the medium term. These include a growing population and increased life expectancy. In contrast, productivity growth is likely to slow down.
November 5, 2025 at 2:54 PM
2/4 There are some key positive developments that are likely over the medium term. These include a growing population and increased life expectancy. In contrast, productivity growth is likely to slow down.
7/7 You can find our blog on our website here: fiscalcouncil.ie/beyond-the-b... You can also subscribe to our Substack page to get notifications of our latest blogs substack.com/@irishfiscal...
Beyond the Budget – Irish Fiscal Advisory Council
fiscalcouncil.ie
October 15, 2025 at 9:16 AM
7/7 You can find our blog on our website here: fiscalcouncil.ie/beyond-the-b... You can also subscribe to our Substack page to get notifications of our latest blogs substack.com/@irishfiscal...
6/7 This matters when assessing how exposed Ireland’s corporation tax revenues are to tariffs and other factors that influence the profitability of these sectors.
October 15, 2025 at 9:16 AM
6/7 This matters when assessing how exposed Ireland’s corporation tax revenues are to tariffs and other factors that influence the profitability of these sectors.
5/7 This alternative method of classifying subsidiaries paints a very different picture. We estimate that the tech and manufacturing sectors accounted for, on average, 87% of the corporation tax paid by large US-owned multinationals in Ireland between 2016 and 2023.
October 15, 2025 at 9:16 AM
5/7 This alternative method of classifying subsidiaries paints a very different picture. We estimate that the tech and manufacturing sectors accounted for, on average, 87% of the corporation tax paid by large US-owned multinationals in Ireland between 2016 and 2023.
4/7 The US publishes data on the corporation tax paid by large US-owned multinationals in Ireland. Importantly, this US data groups each firm based on the main activity of the group parent. US-owned firms make up about three-quarters of Irish corporation tax revenues.
October 15, 2025 at 9:15 AM
4/7 The US publishes data on the corporation tax paid by large US-owned multinationals in Ireland. Importantly, this US data groups each firm based on the main activity of the group parent. US-owned firms make up about three-quarters of Irish corporation tax revenues.
3/7 This is because some firms, often classed as financial and insurance in official data, are part of larger groups which are mainly focused on tech or manufacturing activity. For example, a pharma group’s treasury arm is classed as financial and insurance, not manufacturing.
October 15, 2025 at 9:15 AM
3/7 This is because some firms, often classed as financial and insurance in official data, are part of larger groups which are mainly focused on tech or manufacturing activity. For example, a pharma group’s treasury arm is classed as financial and insurance, not manufacturing.
2/7 Since 2012, official data shows that about 70% of Ireland’s corporation tax revenues have come from just three sectors: manufacturing, tech, and financial and insurance. However, this likely understates the amount of corporation tax paid by the manufacturing and tech sectors.
October 15, 2025 at 9:15 AM
2/7 Since 2012, official data shows that about 70% of Ireland’s corporation tax revenues have come from just three sectors: manufacturing, tech, and financial and insurance. However, this likely understates the amount of corporation tax paid by the manufacturing and tech sectors.
16/16 Again, this assessment is preliminary. The Council will give its full assessment of Budget 2026 in its Fiscal Assessment Report. By then, typically more information will be available, which will allow a more complete analysis.
October 7, 2025 at 5:58 PM
16/16 Again, this assessment is preliminary. The Council will give its full assessment of Budget 2026 in its Fiscal Assessment Report. By then, typically more information will be available, which will allow a more complete analysis.
15/16 Even after accounting for inflation, spending net of tax changes is growing at a rapid pace, over 9% in 2025 5.3% in 2026. This is much faster than the sustainable growth rate of the Irish economy.
October 7, 2025 at 5:58 PM
15/16 Even after accounting for inflation, spending net of tax changes is growing at a rapid pace, over 9% in 2025 5.3% in 2026. This is much faster than the sustainable growth rate of the Irish economy.
14/16 Our first read is that this means that nominal spending net of tax measures is set to grow by more than 11% in 2025 and 7.3% for 2026.
October 7, 2025 at 5:58 PM
14/16 Our first read is that this means that nominal spending net of tax measures is set to grow by more than 11% in 2025 and 7.3% for 2026.