Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

I move amendment No. 41:

In page 75, before section 32, to insert the following new section:

"32.—The Minister shall, within three months of the passing of this Act, prepare and lay before Dáil Éireann a report on the effective rate of tax charged to businesses in this State, analyse the impact the Finance Act 2013 will have on helping businesses to lower their effective tax rate, or in fact increase it, and set out the impact on the Exchequer and businesses of increasing the minimum effective corporation tax rate by 1 per cent.".

This amendment relates to the effective rate of tax on corporations in the State and the impact the Finance Bill will have by either increasing or decreasing a corporation's effective rate of tax. It also relates to a minimum effective rate of corporation tax. The Minister has responded in the past to questions on the tax paid by businesses in the State to say that the average effective rate of tax they pay is 11.9%. That figure is based on a report which examined the company profits. The report did not examine how companies manage to lower their profits in a legal way to avoid paying the full rate of corporation tax. I note that the Minister has undertaken to participate in the OECD's base erosion and profit-shifting project which will examine how damaging international tax loopholes, including ones like the double Irish, are to the fairness of the taxation system and taxpayers.

I have requested on a number of occasions information from some of the top businesses in the State on their turnover, profits and the tax they pay, but it has not been forthcoming. I urge the Minister to examine the role the Irish system plays in transfer pricing and other provisions. We want the Minister to examine how it affects small and medium enterprises and to analyse how the Finance Bill impacts on effective tax rates for companies. While I understand that the effective tax rate is based on profits and do not contest that companies pay 11.9% on that, we all know that arrangements have been put in place by the State and others which allow companies legally to transfer profits out of the State in ways that are very lucrative.

The issue has been raised at international level and the Minister participated in the OECD project. We need to take a serious look at this issue. I have requested that the committee examines this area. My amendment proposes laying a report before the House about the effective rates of tax on businesses and the negative or positive impact of the Finance Bill on those rates.