The total package for Budget 2026 has been confirmed as €9.4 billion with the tax package in Budget 2026 rising to €1.5 billion, up from €1.4 billion last year. This signals continued fiscal support despite global uncertainty and, while welcome, it lands in a context of significant structural risks.
Ireland’s tax base remains highly concentrated. Just three taxes, income tax (36%), corporation tax (29%), and VAT (23%), account for around 90% of total revenues last year. Critically, 84% of corporation tax receipts come from foreign-owned multinationals, and over half is paid by just ten companies. This level of concentration risks leaving the public finances exposed.
As global trade becomes more fragmented, the priority must be to broaden and future-proof the tax system. ensuring it remains resilient in the face of shifting economic value and rising fiscal pressures. It is encouraging to see the government leaning into structural planning, capitalising long-term savings vehicles like the Future Ireland Fund (FIF) and the Infrastructure, Climate and Nature Fund (ICNF) while committing to headline budgetary surpluses.
But the key question remains, is the current tax framework broad and future-focused enough to keep pace with a world where digitalisation, AI adoption, decarbonisation and demographic change are fundamentally reshaping the nature of economic value?
The proposed €9.4 billion budgetary package for 2026, €1.5 billion of such earmarked for the tax package, is rightly framed around investment rather than consumption, a smart move in a world of increased economic fragmentation. There were no details of what might be contained in the tax package but while last year’s summer economic statement contained a reference to helping shield workers from higher taxation, no such reference was made this year. It is also worth noting that if, for example, the VAT rate for hospitality was reduced to 9% as previously indicated, that would constitute half of the available Budget 2026 tax package.
Global protectionism is the new reality, and tax policy must now serve as strategic infrastructure, not just revenue collection. With over half of corporate tax coming from just 10 firms, resilience must become the new cornerstone of fiscal planning and a focus must be placed on Domestic Direct Investment to broaden our tax base.
We welcome the prioritisation of competitiveness in the Government’s Summer Economic Statement 2025. Managing risks and investing in infrastructure now matter more than ever.