Mr. Seamus Coffey:

As for whether the research and development tax credit is worth it, one can look at the figures objectively but the view one forms is up to the individual.

Approximately, €800 million was claimed through the credit each year for the past several years. This means there is research and development activity of approximately €3.2 billion. The rules specify this must take place in Ireland. It is a significant activity. The Department's analysis suggests that 40% of that would have happened anyway. Accordingly, 60% of that research and development activity is additional or new, meaning one is looking at around €1.8 billion to €2 billion of activity taking place, which it is argued is the result of the tax credit. We are offering a tax credit of €800 million to get a €2 billion increase in activity. One then has to work through to determine who is benefitting from that, the impact on employment, wages, spending in the economy and the Exchequer. If the €2 billion is the starting point, it would suggest that it is worth it. However, that is a subjective view. One would have to look at the overall impact of research and development tax credit on the economy.

As regards the concentration risks and whether the Department is doing enough, it has highlighted it. Its annual tax report for 2017 has an extensive section on corporation tax and highlights the risks involved. While this is identified as being a risk, getting all this money is a positive. How does one mitigate against the risk? Do we want these companies to pay less tax? I assume we would like to get the receipts as long as we can. However, we should be building into our macro and fiscal policies that these receipts may not be sustainable into the long term. I am not necessarily sure it is a risk that one wants actively to do something to mitigate. It should, however, be kept in mind regarding policies elsewhere. Accordingly, spending on tax changes introduced should have built in some space to allow for corporation tax receipts to change.

It is well identified and various bodies have pointed to the concentration of risk. The Revenue Commissioners are to be commended on providing this information. It ensures the scale of the problem is known and the caution which should be exercised should spread wider than just among the people in this room.