Joan Burton (Dublin West, Labour) | Oireachtas source

I move amendment No. 158:

In page 142, between lines 19 and 20, to insert the following:

"Report on proposals for digital tax

60.The Minister shall within one month from the passing of this Act prepare and lay before Dáil Éireann a report on the merits of a digital tax regime as proposed by a number of European Union Member States, indicating how such a tax might operate, the likely tax rate and whether the tax paid would be set off against other tax liabilities.".

As the Minister referenced in his most recent ECOFIN meeting press release, the issue of a digital tax has been adopted in principle by a significant number of EU member states. A number of countries are moving to adopt this tax. Most surprisingly, in his most recent budget, the British Chancellor of the Exchequer moved to a digital tax proposal of around 2% to 3% - presumably with rebates relating to tax paid in the UK. I am sure the Minister and possibly his officials were a bit surprised by this proposal by the UK Chancellor. I think this move by the UK is indicative of where the digital tax proposals stand.

It is genuinely difficult for many countries, and it will be even more difficult in the future, to be able to secure additional tax flows and revenues from the very big IT and social media multinationals that are immensely rich and generate vast revenues, that all of us use in our daily lives, and about which there is no global agreed approach as to how they should contribute their fair share of taxation in the different countries in which they sell their products. It is a real problem for national exchequers to have vast economic activity that contributes no taxation. In many ways, Ireland was an early starter in the development of employment and industry in this sector. As a consequence, we have significant numbers of people employed in the sector and very valuable economic activity on which tax is paid in this country. As we move increasingly to automation and robots in the sector, however, we all have to look at how we generate tax flows for national revenues from this vast area of economic activity.

This proposal is very simple. It is to ask the Minister to report to us within a short period after the introduction of the Act to indicate how a digital tax might operate, the likely tax rate and whether the tax paid can be offset against tax liabilities. I have chosen these three points because of the French proposals. By the way, the French made the Minister a very good offer not too long ago and asked for his co-operation on it.

A similar situation is occurring in Italy and it is also happening in Austria. The Germans are actively examining this, and the Spanish, and possibly the Portuguese, have indicated that they are following in the same vein. In terms of our future in the European Union, particularly post Brexit, it behoves us to be as informed as possible about this form of taxation that is coming down the line. While we can decide to stick our heads in the sand and pretend it will not happen, it is already under way. This simply asks the Minister to publish a report that would be made available to the committee and the public in general on how this tax might operate. It may end up being in effect a form of sales tax with abatement for taxes paid in the country. I am sure the Minister's officials have attended discussions on this. I do not know whether it will be abated by other taxes paid by the entities in particular countries, for instance, employment taxes, possibly other contributions such as PRSI and employment and social insurance levies and corporation tax that may or may not have been paid.

I noticed that the British Chancellor, in his statement about this commencing, I understand in 2020 as a fact, pencilled in a couple of billion pounds on an annual basis to the British Exchequer. It is time we had a serious examination of this. The amendment is very simple. It just asks for the Minister's co-operation in having a review of where these proposals are at so that we can all examine them and see how the Dáil might like to proceed in this respect.