Ms Anne Gunnell:

I will first address the questions on the SARP. Ireland is competing with many other countries for global capital investment. The individuals in question are highly skilled and can work anywhere. When a multinational is looking at whether it will invest in a particular jurisdiction, it considers all factors, including the tax system. Some aspects of our tax system, such as the high rates of personal tax, may deter some executives from coming here. One needs an incentive. It is internationally recognised that incentives such as SARP are effective in contributing to bringing people here. We need those individuals in order to support sustained investment and growth in the economy and the resultant spillover benefits, such as the jobs and long-term investment. We are competing with countries such as Spain, the Netherlands, Luxembourg and France, all of which offer a similar incentive because it is needed to encourage these key executives, who are very mobile and can work anywhere, to move to the country and encourage the growth and expansion of particular operations. I accept that there can be inherent inequity in any tax expenditure because one is always focused on trying to address a market failure and they are targeted at a particular cohort of taxpayers. In this case, we are trying to attract global investment for the benefit of the wider Irish economy and we need these individuals to be here to support that investment.

On the research and development tax credit, every international organisation, including the OECD, the IMF and the European Commission, recognises that research and development innovation is essential to the growth of the economy. We need research and development by all types of companies, including multinationals and indigenous firms. We recognise that multinationals have more in-house research and development and the capability to handle the complex requirements inherent in making a claim for the credit. It is a very good incentive and we should ensure that it can be tailored to be more effective for small and medium enterprises.

We want a research and development incentive that works for all companies, multinationals and SMEs.

Third level instituions were mentioned. It is up to policymakers to decide how research and development is funded and the balance in doing it through tax incentives and Government expenditure. We have Government supports, while Enterprise Ireland has many grants and vouchers; therefore, there is already such an element. It is a way of linking up and encouraging SMEs to partner with third level institutions through incentives. Policymakers could consider investing more in that regard.

Our research and development incentive works. The feedback in our survey was that, for those claiming the incentive, more employment had been generated. Therefore, we should try to ensure we can get more SMEs to claim it.

I will ask Ms McGuinness to respond on the point about film tax relief. She has been more involved in what has been happening with Revenue and at the Tax Administration Liaison Committee, TALC, about film relief.