Ms Cora O'Brien:

I will address some of the other questions Deputy Chambers asked. On the share options scheme, the main difficulty with share options is that income tax is charged on options when they are exercised, which is likely to be before the person has sold the shares. As such, the person will not have money to pay the tax. A capital gains tax also applies. Both these taxes are high.

Share options are generally provided in small companies. For example, a person may wish to forgo a high salary in a large company to take a chance on an innovative company achieving growth. Offering such persons share options to work for the company is an important way of attracting talent to small and innovative companies. While share options must be taxed, in other countries, for example, Sweden, they are taxed at the point at which the person sells the shares and has cash to pay the tax. In such circumstances, the sale is subject to capital gains tax. We would like to see a share options scheme as small companies, in particular, need one.

On personal tax, a debate is taking place on whether to use the €200 million available to reduce the universal social charge or widen tax bands. We are trying to move forward from the budget to budget approach. There are different proposals on the table, all of which are intended to relieve the tax burden but only by a little as there is not much fiscal space available. Our focus is on growing the fiscal space to ensure we have more money to play with in future as we seek to make the necessary reforms to the personal tax regime.

The decision to reduce the corporate tax rate to 12.5% was one of the best things we have ever done in terms of tax strategy and in providing certainty and assurance. The current rate is generating corporate tax receipts at equivalent ratios to countries with much higher rates. It is also the right thing to do for a small and open economy. The debate about corporate, personal and capital tax must take place against the backdrop of the type of economy we have. Our message is very much that we should start with the overall economic objectives and needs and work back to tax policy, rather than taking each tax head in isolation and arguing it should be set at this or that rate. I agree the corporate tax rate is very sustainable and certain.

Corporate tax is volatile in all countries. While Ireland has a high dependency on foreign multinational companies - these companies are very welcome and the money they provide helped us through the crisis - one of the reasons we produced the report was to seek to achieve greater balance and sustainability by generating more revenue from the domestic sector.