Ms Olivia Buckley:

I will address the Deputy's question on the tax base as it provided the backdrop to our research in which we focused strongly on the sources of tax. In budget after budget, we have debate and conflict surrounding the small amount of money available to respond to major demands for increases in expenditure on capital, social services, housing and health. We also have a small amount available for tax cuts to relieve people of the burden of taxation on labour. We need to focus on a plan for growing the tax base. In a country with a population of 4.7 million, there is only limited scope for broadening the tax base from domestic sources. Some 40% of Exchequer returns come from labour, while a further €10 billion is collected from PRSI, although technically PRSI does not qualify as a tax. These are significant sums which are collected on the back of labour and work. VAT generates another substantial amount of State income.

Unless we want to increase taxes, which is a very difficult decision, the only way to broaden the tax base is to achieve growth outside the country by taking advantage of external opportunities. One of the areas on which our study focused was services, the largest area of growth in world trade and an area in which Ireland is particularly good. Trade in services is growing at 10%. While we have the potential to take advantage of this growth, we also have significant skill shortages in this area. For example, one State-owned website, TechlifeIreland.com, currently features 3,000 job vacancies. We must avail of the advantages that present themselves. Growing the tax base means asking what we can do outside our population of 4.7 million people.

In the context of the Brexit debate, one of the questions being asked is why a country would remove itself from the European market and the seamless transit it offers for goods, services and people. We can take advantage of the value this market offers. On the economic front, recent positive figures show growth returning to the eurozone economy. The question is how we can take advantage of this and grow our tax base. The way to do this is through exports but this requires us to have entrepreneur and business friendly tax policies as we face into a budget with tight constraints.