Ireland, alarm over public finances: multinationals’ tax revenue is funding current expenditure
The Irish Fiscal Advisory Council warns: spending is growing faster than the economy can sustain, whilst corporate tax revenue remains concentrated in a handful of US companies
Ireland risks squandering the wealth it has accumulated through taxes paid by large US multinationals. The alarm has been raised by the Irish Fiscal Advisory Council (IFAC), the independent body overseeing public finances, which argues that the government is increasing spending at an unsustainable rate, thereby increasing the budget’s dependence on highly concentrated and potentially volatile tax revenues.
In recent years, the country has benefited from an exceptional influx of revenue from corporation tax paid by a small group of tech and pharmaceutical giants that have established significant operations and intellectual property assets in Ireland. Thanks to this trend, Dublin has recorded substantial budget surpluses for four consecutive years. For 2026, the government forecasts a surplus of €9.2 billion.
However, according to the new IFAC report, the growth in net public spending between 2025 and 2028 will be the highest in the European Union. This trend outpaces the growth in national income and increases the exposure of public finances to a source of revenue concentrated in the hands of a few large American companies.
IFAC President Seamus Coffey pointed out that, between now and the end of the decade, for every €6 collected in corporation tax, only €1 will be set aside, whilst the remaining €5 will fund the State’s current expenditure. This is a significantly lower savings rate compared to the 2022–2025 period, when around 34% of corporation tax revenue was set aside.
“Public finances are becoming increasingly reliant on these corporate taxes, which continue to grow and become concentrated in the hands of a few, yet an increasing proportion is spent immediately,” Coffey noted.
