Revenue Annual Report 2017 and New Research

This morning Revenue published our Annual Report for 2017. The report contains lots of information on Revenue’s activities and outputs last year that contributed to the collection of €50.8 billion in net receipts for the Exchequer, as well as delivering on service to support compliance, the implementation of customs controls and facilitation of trade.

Also published today are a series of research papers that may interest readers of this blog:

Updated Corporation Tax research profiles tax payments received in 2017 as well as analysis of 2016 tax returns. This includes significant new analysis of multinational companies in Ireland.

An analysis of Income Dynamics and Mobility based on Revenue micro data. This examines the distribution of incomes by decile and percentile as well as tracking mobility of income earners over time.

Profiles of Excise Duty and Capital Taxes receipts. Excise, Capital Acquisitions Tax , Stamp Duty, Capital Gains Tax and Local Property Tax cover wide ranging activities, transactions and products. The profiles document these in detail and show changes in core components in recent years.  For the first time, information on capital taxes are combined together with location and earnings data to present new perspectives on the taxes.

Revenue’s latest customer survey, of small to medium sized enterprises in 2017, is Revenue’s fourth SME survey. Responses show that customer satisfaction with Revenue service remains high across a range of headings. The survey also includes a behavioural experiment to test the impact of personalisation on response rates.

Also published is the annual illegal tobacco survey results for 2017 and the first quarterly Local Property Tax statistics for 2018.

 

Author: Keith Walsh

Head of Statistics & Economic Research in Revenue

3 thoughts on “Revenue Annual Report 2017 and New Research”

  1. Table 23 of the revenue annual report surely contains one of the most extraordinary pieces of information that one is likely ever to see regarding the Irish economy, or indeed any economy.
    The data on the first row showing that almost 90,000 corporations, out of a total of 146,000 corporation tax returns, paid no corporation tax is extraordinary enough. But when we see that those 146,000 corporations employ over 600,000 people ( accounting for a third of the workforce), the situation as outlined seems barely believable. If a third of the total workforce work for companies who don’t make enough money to pay tax, or manage to avoid paying it, then something is surely awry.

    The economists who concern themselves with ‘volatility’ of CT and its dependence on large FDI corporations might need to focus a little more on the first row of table 23, rather than on the big fish.

    1. Joseph,

      It is a difference between collecting tax at 12.5% versus collecting at it somewhere near 50%. You seem to prefer 12.5%.

      Almost all the companies in this group are small companies. Looking at the average number of employments per company might be misleading but maybe it would help your thinking. Do the arithmetic. What type of enterprises do you think are in this group?

      In some cases the company may not be trading so doesn’t have a profit or tax liability. In many of the cases it will be a small company where the owner of the company would also work for the company. There are two reasons why such small companies would not be reporting a profit. 1) They simply aren’t profitable which isn’t good or 2) the owner takes most of the profit in remuneration for themselves which is good – and particularly good from a tax revenue point of view.

      If the owner left the money in the company it would be subject to Corporation Tax at 12.5%. By taking the money out as pay to themselves it becomes subject to our range of income taxes which obviously come to a much higher rate.

      It would be unusual if people could easily set up companies that generate profits that exceeded their requirements for their ongoing living expenses. But it just isn’t that easy. Generating enough to keep their head above water is hard enough.

      What yesterday’s report clearly shows is that the “big fish” are where all the action is (including those large companies who manage to get into this category). Your concern about the little guys “who don’t make enough money to pay tax, or manage to avoid paying it” is based on an incomplete view unless you have also seen their income tax returns.

      1. Seamus
        I find your arguments unconvincing, and there is clearly an underlying lack of profitability in companies ’employing’ over 600,000 people, or some other reason for these extraordinary figures.
        Even if the 600,000+ people worked in small one to two person companies, it means that no residual profit is being left in the company, but all ‘profit’ is being extracted in the form of salary (taxed at 30%-50%), or pension contributions (not taxed!!). [There is also the possibility of losses forward from the recession, but this should be dissipating in 2016]. It is not credible that people would extract money to be taxed at 50%, rather than leave it in a company to be taxed at 12.5%, unless the money was essential to their lifestyle. In reality most business owners try their damnest to grow their businesses, which makes the figures all the more inexplicable to me. That is not a healthy scenario, and displays a lack of profitability that appears to defy the reality of recovery in the country.
        There is one column missing from the table, which is the trading profits of the companies before capital allowances, losses forward etc. Figures that are available to the revenue. Those figures, if produced, that might shed some light on what is happening.

        The “action” may well be in the ‘big fish’ numbers, but if one is concerned about performance and balance within the economy, I personally would start with a more rigorous analysis of the fact that over 60% of companies, employing over 30% of all employees, do not earn sufficient profits to be in a position to pay any tax.

        [The table 23 referred to should have table 23 in the Updated Corporation Tax Research report linked above]

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