Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

With respect, the Deputy cannot point at me and ask how I would deal with a revenue loss, given that he is looking to abolish the tax that generates the revenue in the first place.

I will respond to the Irish Fiscal Advisory Council's comments on medium-term expenditure by citing the example of public pay. If we were to outline now what we believe increases in public pay will be in 2021, 2022 and 2023, it would have a fundamental effect on those figures by the time we got to agree them with leaders of the trade unions, with whom we negotiate those increases. If I were to indicate now what social welfare packages will be in 2022 or 2023, that would have a big effect on the policy decision made by the Minister for Employment Affairs and Social Protection on the day. Where I differ with the Irish Fiscal Advisory Council's analysis is that I believe that if we were to go down the path of current expenditure modelling, it would, by and large, eliminate policy discretion for the Government of the day in respect of where funding would be allocated between different Departments. We should relinquish that discretion with care.

On the Deputy's point on corporation tax, other documents published by my Department have acknowledged that the concentration risk definitely applies to corporation tax in that a smaller number of companies are paying a large share of that total tax head at the moment. It was for this reason that we increased VAT in the hospitality services, which the Deputy's party opposed. That measure was introduced to begin to broaden the tax base. This was also the reason we calculated our tax figures for this year on the basis of collecting a lower level of corporation tax than we collected last year. While there is a vulnerability which could develop in the future, what institutions such as the Irish Fiscal Advisory Council would argue, and I agree with them, is that we need to broaden the tax base. The Deputy was against all the ways we proposed to broaden the tax base.