Ireland considers new sovereign wealth fund for corporate tax revenue
📌 Ireland is considering using its skyrocketing corporate tax receipts to create a new sovereign wealth fund, according to Finance Minister Michael McGrath. The fund would act as a «longer-term public savings vehicle» for windfall receipts and could be used to pay down debt, pensions, and healthcare spending.
📌 Indeed, Multinationals in Ireland have paid record amounts of corporate tax in recent years with tax receipts rising by 30% year-on-year in 2021 and a further 48% in 2022 to a record €22.6bn ($24.8bn). These record revenues on corporate taxes come in part from tech giants like Meta, Alphabet, Amazon, LinkedIn, or Intel. These Multinational-dominated sectors now account for more than half of GDP in the country.
📌 In addition, Ireland is one of the few countries in Europe to record a budget surplus. It was 5 billion last year and the country estimates its budget surplus could hit 6.3% of GDP by 2026, amounting to €65bn over four years.
📌 However, some economists have warned of the potential for political influence over the fund, and the existing rule limiting annual spending increases to 5% is likely to remain the primary fiscal tool for Ireland.