Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I am concerned about this. The Minister is well aware that I am critical of the various means by which very profitable corporations reduce their tax liability to the point where they are paying a fraction of the 12.5% headline corporation tax rate.

While we are all in favour of research and development, I am very concerned at the massive gap between the net amount of tax paid versus the gross profits of, largely, the bigger corporations here. The tax tables that the Department of Finance provided to me make it clear that while small and medium-sized enterprises pay the 12.5% - there are not many ways out of it for them - there is an enormous gap between the gross profits and the taxable profits of the big corporations such that they end up paying a tiny fraction of the 12.5%. It is completely unacceptable that these companies and their high-powered accountants can use headings, such as research and development, group losses and trading losses from previous years, to reduce the level of taxable profits such that they end up paying next to nothing. In that context I worry about giving further opportunities to these corporations to reduce their tax liability.

While I might be alone on this, I find it shocking that we have €70 billion of gross profits declared in this State and only €4 billion in tax, which represents 6.5%. Regardless of how one massages the figures and talks about accountancy standards, I do not accept it. I take the point the Minister made last night about closing off some of the tax loopholes that high-earners were using to reduce their effective tax rate. He pointed out that it was possible to increase the minimum effective tax rate notwithstanding that there are still ways for people to reduce their tax liability, some of which may be legitimate. Irrespective of all that, it is possible to say that there will be a minimum amount of tax that people will pay if they are high earners. Exactly the same principle should apply to corporations. Notwithstanding various incentives or tax breaks for particular activities, we should insist that they must pay a minimum amount before they start to benefit from tax breaks under any category. That is the least we could do when everybody else in the country is being hammered for increased tax and austerity in one shape or form. The corporations are getting away scot free and paying a fraction proportionately of what everybody else is paying.

Against that background, I am not happy with this section and others we will discuss later. These issues need to be discussed, debated and interrogated. I reserve the right to table a Report Stage amendment.