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

As for the sheltered relief, the passive investment and the intention of this amendment, I acknowledge the note on the amendment indicates it would delete section 16 of the Bill. However, that is not its intention, which is to have a review. Consequently, I do not understand the reason this would be the effect of accepting it and it is not its intention. A three-year period is a long time. If one waits for three years and allows these individuals, who are higher earners subject to this restriction, to be exempt therefrom if they invest in this way, one will not know how meaningful this will be. Members have just dealt with the section in the Bill pertaining to the research and development tax credit for key employees and while they have had three years of dealing with this section, there are still only seven individuals who avail of it. That is not the fault of the Minister, of me or of anyone else, but is due to whatever way the provision is written or in whatever way companies are structured.

However, the opposite might occur, in that there could be a flood of investment from high earners who normally would be restricted from reducing their income tax liability to the State as a result of the high earners' restriction. The restriction was put in place as a result of considerable public pressure on the ability of high earners to reduce their tax liability to a very low base. The public demands that everyone pays his or her fair share, particularly those who are in the highest earner category and that such people do not use tax reliefs to write down their tax liability. These are investments and it is not as though they are charities or that those concerned are giving away their money. They are getting a return on the back of it, despite the possibility that it is risky. However, this provision is both an incentive for them to invest and get a return and an opportunity to reduce their tax liability. Consequently, although members do not know, it is possible that in three years' time, a huge amount of money could have gone in this direction. A huge amount of tax could have been foregone to the State and I suggest the Minister should build in a review. Even if that did not involve formally asking a consultant to carry out a review, one could track the numbers of people who have availed of this provision after the next tax year and then reassess it before members return to deal with the finance Bill for 2015.