Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

There is no question that this is an issue of concern. When one considers Ireland's overall tax take, one would intuitively expect a higher percentage of it to be accounted for by corporation tax than is the case at present. When one considers the number of large multinationals based here, one would rationally expect corporation tax receipts to be higher. This is a matter with which we must deal very carefully, particularly as it is very much part of a European context.

Many of the Minister's colleagues at ECOFIN level are very envious of Ireland's corporation tax rate. They are aware that the country is in a bailout programme and they would love to get their hands on our corporation tax rate. No one has suggested that we should change our rate but the certainty of our regime affords us certain benefits. My views on the matter have evolved but if we begin to tinker with such as minimum effective rates, it could potentially be quite dangerous.

Very few people fully understand the system as it works.

I am sure some of the Minister's officials and the key people in Revenue understand the reliefs a relatively small number of companies that have bases in Ireland use to reduce their corporation tax liability, the manner in which the taxable profits are arrived at and some of the more complex reliefs that are deployed. Given that there is such a focus on this issue at European level, we need to be careful and certainly we should not prepare any report that could in any way undermine the negotiating efforts of our Government and its efforts to protect the regime as we have it.

Overall, Ireland is benefiting from the current corporation tax regime that we have taking into account the rate and the manner in which the taxable profits are calculated using the reliefs. If that whole issue were to in any way come on the table, I would be concerned about the direction it could go, given that I have no doubt many of the Minister's colleagues want to get our corporation tax system changed. They have tried to do so before and they will try again. Therefore, we need to be united in how we approach it.