Irish Finance Minister calls €14bn Apple tax windfall ‘transformational.’

The Irish Finance Minister has described the €14bn windfall tax from Apple as “transformational”. This comes just weeks after the Irish government lost its case at the European Court of Justice arguing that the tech company should be allowed to keep its money.

Jack Chambers, who unveiled the budget for the country on Tuesday, said that the money will be spent on infrastructure, and not on giveaways, before the upcoming general elections in November.

The US tech company has lost a high profile tax battle in Brussels, as the European Commission attempts to crack down on “sweetheart tax deals” for multinationals. The ECJ ruled Ireland gave Apple illegal tax breaks, and Ireland must recover that money. The recent judgment of the European Union’s court of justice has given the state a one-off income that can be transformative. Chambers said Tuesday that the future performance of the economy will be determined by the way the public infrastructure program is prioritized over the next decade.

He added that it was important to not use the revenue for daily expenses or to reduce the tax base. It would instead be used to improve infrastructure in the areas of water, transportation and energy along with housing support to ease the crisis that has been a major concern for the government during its near five-year tenure.

Ireland is awash with riches as the UK and European economies struggle with financial blackholes. The country has accumulated a record €25bn in surplus. This is largely due to the ECJ’s ruling last month, which ordered Apple to pay back years of unpaid tax. The windfall will be deposited in two tranches: €8bn for this year, and €6.1bn for next year. This will give the finance department of the country a projected €105bn tax revenue by 2024.

According to figures released by the government before the budget, corporate tax receipts were up 28% year-on-year even before the Apple judgement last month. With Apple’s one-time revenue, Ireland expects to collect €38bn in corporate taxes, with half coming from the top 10 multinationals. These include tech giants Microsoft and Intel and pharmaceutical companies such as Pfizer.

Chambers reiterated that the government believes foreign investment is crucial to the success and growth of a small country like Ireland. “Our industrial and economic model is key to our future progress.” Our country has changed dramatically from 200 years ago. The Minister said that €3bn of the proceeds from the sale state shares in Allied Irish Banks, which were bailed out following the financial crash in 2008-09, will be used for infrastructure expenditures.

Simon Harris, the Taoiseach of Ireland, announced before the budget that the government would give some money back to the voters who have been suffering from a cost-of-living crisis for many years. I make no apology for giving back a small amount of money to people between now and the Christmas holiday. That’s what we need to do to give people the time to adjust to the inflation rate and the bills.

Most analysts believe that November is the most likely time for voters to start benefiting from the budget spending. The housing changes include an increase of stamp duty from 10% to 15 % for bulk buyers; a similar tax increase for homes valued at more than €1.5m, and a property tax increase for owners of vacant homes.

Vapers will be charged 0.50c for every ml of liquid e-liquid. Chambers stated that the country is close to full employment after the pandemic, but that more jobs will be created by the projected increase of 2.5% domestic demand.

The government expects inflation to be below 2% in both this year and the next. He said that the national debt to income rate had fallen to 69% in 2011 from 110% and would fall to 56% at the end of this decade.