Mr. Ian Talbot:

We have not compiled up-to-date figures for the 9% VAT rate, but it speaks for itself in terms of the generation of demand. Like everybody else, we are constrained by resources and cannot work out all of the numbers. We all approach the various Departments at times for help in pulling them together. I have spoken to colleagues of the Deputy about how we might price things.

For a company that is not using a cash basis for paying VAT, which is any company that has a turnover of more than €1 million and many under this figure, if an invoice was issued the week before last, the VAT is owed next week, even though the money might not be collected until Christmas. On a cash basis, the company will pay the money over as it collected, rather than as it is invoiced. Dublin Chamber of Commerce carried out some research and about 4,500 companies would be in the gap between €1 million and €2.5 million in turnover. The cost to the State is only a funding cost because the money comes in but on a slightly delayed basis. Originally, it was estimated that the funding cost would be about €100 million, but that has been cut back quite significantly and the estimate is now less than €50 million. That is an estimate if pretty much every company converted. It is a one-off small hit, but the money comes in eventually. We anticipate that if we get the confidence measures right, the overall growth in tax revenues from a boost in the economy would sort things out.

We never saw the upward-only rent review issue as a big issue around the country. It seems to have been generated as a big issue largely in the Dublin 2 area and we hear less and less about it around the country. Generally, we have found that landlords and business tenants around the country have come together and found sustainable solutions most of the time. We know that it is a source of anxiety for people who are still caught in one of these clauses; therefore, we have tried to come up with recommendations to ease the pain for such small businesses such as giving a double allowance for an old lease up to a capped amount.

The Deputy has spoken about companies that were performing well but then bought a property asset. They now have a good underlying business but a big loan with a not so valuable asset. In our experience, these companies just have to grind it out. We are now the best part of seven years into the crisis and many companies have managed to survive and grind it out. The survivors can keep going with a little confidence.

My final comment is on the 12.5% rate of tax. The difficulty is with the manner in which global companies use their global tax position. From our perspective, we fully support having a 12.5% tax rate. The Government will introduce incentives at different stages for investing in equipment, research and development and so on and we expect and believe companies are paying these taxes. There is an international dimension to the issue.