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

I genuinely welcome this and the other proposals. As Mr. Flannery said, we can put flesh on the bones of this idea. If I thought there were hundreds of people availing of this scheme and some of them might attempt to abuse it, it could be justified by the number of genuine people who have Irish residency status in America or Canada or wherever else who want to contribute to this scheme, but the reality is that we all know there are people here who moved their interests overseas in order to reduce their tax liability. The State has been trying to restrict this behaviour. We have got rid of the Cinderella clause. The Commission on Taxation has recommended that we tighten further, for example, that the abode and centre of interests not be recognised on the basis of a number of days. Some of these individuals may buy tax residency because their accountants will advise them that €1 million per year for the next ten years will buy tax residency, with the clause that €5 million must be invested which may or may not provide a return. It is a cost of €1 million for tax residency for an extra 42 days per year. That is a significant bonus for people who deliberately moved their interests overseas in order to reduce their tax liability but still have interests here. It is a very cheap price. I am concerned about that aspect. While there would be a gain in terms of philanthropy, overall, there would be a loss to the State because if we were to change the tax residency rules to make them more restrictive, the State would benefit far more. These are my genuine concerns.

I have seen how the scheme has been abused in the past and this scheme could be open to abuse by a couple of individuals. While there would be a benefit for one section, there would still be a huge loss. We would be complicit in facilitating tax avoidance through making the system more open and more available for these people to do what they are doing. This goes against the grain of what is happening. It is appropriate this proposal is put on the table at this time, following the Department's review. We need to look at how this proposal can fit in to a system that will strengthen tax laws for tax exiles but also provide an incentive. It does not go in the direction of the carrot and stick approach I suggested, but it goes forward in a different direction. I am very conscious of the cliff we face and of the huge amount of work this movement has done and of the generosity of a number of people. I have seen the projects and we have benefited from them. I have also seen the results in terms of the peace process, not just funding for the process itself, but the support given by the organisations. It is hugely important this continues. I am unsure about how exactly, but we can tease it out. I am very open-minded on it.