## Considerations for a Stronger Fiscal Framework in Ireland

_Selected Issues Papers, July 7, 2025_

## Source details

**Canonical URL:** [Considerations for a Stronger Fiscal Framework in Ireland](https://www.imf.org/en/publications/selected-issues-papers/issues/2025/07/07/considerations-for-a-stronger-fiscal-framework-in-ireland-568306)

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## Bibliographic details
- Authors: Waikei R Lam, Rossen Rozenov, Yang Yang, Yinjie Yu
- Published: July 7, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229015417.018

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### Summary findings
- Ireland’s reliance on corporate income tax (CIT) receipts from multinational enterprises (MNEs), concentrated in a small number of companies, presents significant risks to the budget.
- The paper proposes strengthening the national fiscal framework by:
  - establishing a prudent medium-term debt anchor; and
  - introducing an expenditure rule to guide the annual budget process.
- The operational approach aims to stabilize debt at the anchor level while accounting for the economy’s cyclical positions.

### Analytical approach and key concepts
- Calibrate CIT shocks and simulate possible debt trajectories to establish a prudent debt anchor.
- Design an operational rule based on multi-year expenditure ceilings that:
  - stabilizes debt at the anchor level; and
  - accounts for cyclical positions of the economy.
- Key terminology used: CIT shock, Corporate income tax, Debt Anchor, debt fan, debt trajectory, Expenditure Rule, Fiscal governance, Fiscal Rule, Fiscal rules, Fiscal stance.

### Policy recommendations and operational proposals
- Establish a prudent medium-term debt anchor for Ireland informed by calibrated CIT shocks and debt trajectory simulations.
- Implement multi-year expenditure ceilings as an operational expenditure rule to:
  - guide the annual budget process; and
  - stabilize debt at the chosen anchor while incorporating cyclical adjustments.

### Publication and document metadata
- Title: Considerations for a Stronger Fiscal Framework in Ireland
- Authors: Waikei Raphael Lam, Rossen Rozenov, Yang Yang, Yinjie Yu
- Date: July 7, 2025
- Pages: 36
- Volume: 2025
- Issue: 088
- Series: Selected Issues Paper No. 2025/088
- DOI: https://doi.org/10.5089/9798229015417.018
- Stock No: SIPEA2025088
- ISBN: 9798229015417
- ISSN: 2958-7875

*Source: Considerations for a Stronger Fiscal Framework in Ireland (Selected Issues Papers), July 7, 2025.*

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/07/07/considerations-for-a-stronger-fiscal-framework-in-ireland-568306_