John Halligan (Waterford, Independent) | Oireachtas source

I listened to the rationale for the amendments proposed by Deputies Bríd Smith and Boyd Barrett. It might be useful to remind Deputies of the intention behind the Bill. It is the introduction of the KDB certification scheme for SMEs to be administered by the Patents Office. The process before the office involves the examination of the application to ensure that the invention the subject of the application meets the criteria of being novel, non-obvious and useful. If an application meets these criteria, the office will grant a certificate. If not, it will not issue one. The certificate provides the gateway for small to medium enterprises to apply for the 6.25% corporate tax rate on profits arising from the invention. The grant of the certificate does not, however, guarantee that an SME will qualify for the lower rate of corporation tax. I am saying all this because I did not get an opportunity to say it in the Dáil. Revenue will consider tax returns on the basis of the provisions applying to the KDB scheme, which was introduced by the Minister for Finance in the Finance Act 2015 and which came into effect in January 2016. Revenue will always have the ability to obtain necessary information on the KDB in order to provide reliable information in return to the Government, particularly the Department of Finance, on the use of the KDB, including information on revenue foregone by the Exchequer. That is very interesting.

I understand the Deputies' desire to ensure monitoring and evaluation of the existing schemes in the research, enterprise and taxation areas. It is, of course, necessary to protect taxpayers' money to ensure that the new schemes introduced provide the State with value for money, as they must. I assure the Deputies that the process of monitoring and evaluation of all research, enterprise and taxation is ongoing and regularly reviewed. In the case of the KDB scheme, I remind Deputies that the reports on tax expenditure published with the budget in 2015 provided an ex anteevaluation of the KDB. That evaluation outlined the basis for the best estimate of tax foregone of €50 million. This €50 million is in respect of all aspects of the KDB, not just certification.

To answer one of the questions on monitoring and evaluating and the opportunity for Deputies such as those opposite to carry out an analysis of the scheme, the annual Estimates allow that. That, as far as I know, is correct, is it not? Any Deputy in the House may, during the Estimates process, bring an evaluation or assessment of the scheme before the Dáil based on the information that has been given. The information comes from the Comptroller and Auditor General to the Minister, who is obliged to provide it. It would be folly for any Minister to provide wrong information because he would be failing to provide the proper information accredited by the Comptroller and Auditor General. As such, there is an opportunity in the Dáil to, as each Deputy sees fit, evaluate how the scheme has worked in all its aspects including tax credits, small to medium businesses and large business. It is open for any Deputy to do that in the Dáil, particularly in the context of matters relating to the portfolio of the Minister for Finance.