Mr. Brian Keegan:

I am grateful for the amount of attention Senator Sean Barrett has paid to our submission. The rate of 12.5% was introduced by a coalition Government and sustained by two or three more coalition Governments. It was introduced by a Labour Minister. It was sustained by Fianna Fáil Minister and is currently being sustained by a Fine Gael Minister. It is almost hard to see any aspect of Irish fiscal policy that has got so much support across the democratic spectrum. The system is good and has been instrumental in ensuring people can get jobs here rather than get on a boat or aeroplane to get jobs abroad. It has made a real difference to the economy and we do our best to support that particular policy. Of course, it is tied into the area of tax avoidance.

One man's tax avoidance scheme is another man's legitimate tax relief. Investing in a pension is one man's tax avoidance while it is another man's tax relief. It is a question of degree. One of the distinguishing characteristics of the Irish tax system, which is to the credit of everybody involved, both in the public and private sectors, is the extent to which we regulate tax avoidance. Since 1988, we have had a general rule that ensures that if a tax relief is being abused, the Revenue Commissioners can overturn it. A comparable rule was introduced in Great Britain only on 1 July of this year. We have had a rule that requires businesses, when entering into a scheme that could result in unacceptable tax avoidance, to notify the Revenue Commissioners not at the time of making a return but in the same week in which the transaction takes place. We have an extraordinarily tight and robust system within our existing tax framework for managing and controlling excessive tax avoidance. As mentioned, the system is an example to the British, who have just implemented it, and it is the reason we can sustain and have sustained attacks from politicians in the United States and France and from the European Union infrastructure against aggressive tax planning. We robustly manage and control the system.

The opportunities for tax avoidance are very frequently the manifestations of Government policy. The Government wants people to contribute to their pension funds. There is pensions tax relief. The Government wanted people to produce decent rented residential accommodation. When I was going to college, one could not get a decent flat for love nor money.

Section 23, for all its faults, fixed this. It, arguably, went on too long but it fixed it. We had manufacturing relief that became the 12.5% corporation tax rate. The Minister for Jobs, Enterprise and Innovation addressed our annual conference some time ago and encouraged accountants to make people aware of the tax incentives and reliefs available to support business. We are happy to do this. I accept that aggressive tax avoidance is a difficult and dangerous activity that drags the country into disrepute, but we must see it in the context of an extraordinarily robust infrastructure in our tax legislation which stops the worst excesses.