Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I move amendment No 126:

In page 40, after line 35, to insert the following: 22.The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the revenue gained from increasing corporation tax to 25 percent for corporations with over €800,000 in profits and in closing loopholes that exist that allow corporations to hugely reduce their rate of tax.”.

The basic point I would make to the Minister is that corporate profits have shot through the roof in the past seven or eight years. For example, in 2012 corporate pre-tax profits were €74 billion gross. In 2018 they were €182 billion, an increase in profits of more than 100%. That is an astronomical increase, and it happened during a period when Fine Gael was in various governments. I suspect those profits have continued to rise. We are always a bit behind in the declaration of corporate profits for tax purposes but some sectors have continued to make super profits. Many IT companies, which are among the largest companies responsible for those profits, and the pharmaceutical industry have made significant profits. I am sure when we see the figures for 2019 and 2020 we will see further increases.

Those companies managed to reduce their tax liability through a whole series of deductions, reliefs and allowances. Of the €182 billion pre-tax gross profits in 2018, the taxable income was €96 billion. So nearly half of the profits that were made were not taxable because of reliefs and loopholes. If the 12.5% tax rate was applied to €182 billion we would receive in excess of €20 billion but instead we have just €10 billion for that year thus showing an effective tax rate of about 5.7%. The myriad loopholes, reliefs, allowances and so on means that they are not paying 12.5% and paying less than half. If that situation was unfair before now then it is even more unfair in the context of the pandemic when huge numbers of people are really suffering yet some of these companies continue to enjoy absolute super profits. Our contention is very simple. They should, as an absolute minimum, pay 12.5%. Indeed, Deputy Barry's motion goes a bit further by suggesting that the rate should be higher. We should also close the loopholes that allow companies to pay a fraction of the nominal rate of tax.