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Ireland hikes surplus forecast before budget

Ireland’s Minister for Finance and Public Expenditure Paschal Donohoe finds a European Financial Forum event in Dublin, Ireland February 13, 2019. REUTERS/Clodagh Kilcoyne//File Photo

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DUBLIN, Sept 24 (Reuters) – Ireland on Saturday almost doubled its budget surplus forecast for 2022 to 0.9% of gross domestic product because of booming corporate tax revenues, giving it extra resources to greatly help consumers with inflationary pressures.

The forecast premiered prior to the annual budget, that is because of be published next Tuesday, and the figures usually do not include any measures to be announced that day.

Ireland’s general government balance for the entire year is forecast to be 4.4 billion euros ($4.3 billion), or 0.9% of GDP, up from the July forecast of 0.5%, the finance ministry said in a statement.

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Finance Minister Paschal Donohoe said a few of the surplus of over 4 billion euros will be used to invest in “an easy package of once off measures … to aid citizens and businesses with the true challenges they face because of rising prices.”

He didn’t say how much would be allocated to the measures.

The ministry said that minus the “windfall” part of its corporate tax receipts – which it estimated at 9 billion euros of a forecast haul of 21.05 billion euros – Ireland may be facing a deficit of 0.9% in 2022.

Corporate receipts, mostly generated from big multinationals drawn to Ireland partly by its low corporate tax rate, have surged recently and now constitute almost 25 % of most tax revenues. However the government has repeatedly warned they are volatile and can’t be relied to fund ongoing spending.

The ministry forecast that the surplus next year will be 11.8 billion euros, or 2.2% of GDP, if no new budgetary measures were taken because of a forecast record corporate tax take of 22.7 billion euros.

($1 = 1.0320 euros)

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Writing by Conor Humphries; editing by Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.

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