Denis Naughten (Roscommon-Galway, Independent) | Oireachtas source

I move amendment No. 160:

In page 66, between lines 2 and 3, to insert the following:

“PART 6

REPORTS

Report on use of Irish taxation system for tax avoidance purposes

55.The Minister for Finance shall, in advance of Budget 2022, publish a report on the use of the Irish taxation system for tax avoidance purposes by companies who source their income from international activities which undermine both the Government’s public health policy and climate policy, and the divestment actions of the Ireland Strategic Investment Fund, namely: (a) tobacco companies; and

(b) fossil fuel companies.”.

I wish to bring to the Minister's attention a report in The Business Postof 1 November. My amendment relates to that and another connected issue. A probe was carried out by the University of Bath and some Dutch investigative journalists that cast light on how tobacco companies are lessening their tax liabilities. There is nothing illegal about what these companies are doing. We are talking about the four big tobacco companies across the globe. They are using Irish subsidiaries as part of an elaborate tax avoidance strategy according to this research. Between them, these companies generate about €80 billion per annum. Measures have been introduced in this country and every other developed country to try to curb the consumption and purchase of cigarettes by increasing taxes and levies, which, thankfully, has had a resultant drop off in the number of smokers, particularly older smokers; there is still a challenge with younger smokers. What these companies are now doing, however, is maximising the amount of profit they are generating from their existing sales. They are using very elaborate tax vehicles to do that, which are within the existing legal structures.

What I am looking for is for us to close off these vehicles for tobacco companies. It is imperative that we send out a clear message about smoking, the people affected by it and its knock-on impact on our health service by, among other things, probably making people more prone to infections like Covid-19. We also should deal with it at the other end, that is, at the corporate end, and ensure that whatever vehicles are being used, legitimate as they seem to be, are closed off to tobacco companies.

There is another cohort of companies to which this vehicle should be closed off, namely, fossil fuel companies. We have the Fossil Fuel Divestment Act 2018 on which the Minister and I worked closely. This Act clearly states that the Ireland Strategic Investment Fund, ISIF, is divesting itself of investments in companies that derive more than 20% of their revenues from the exploration, extraction or refinement of fossil fuel. ISIF no longer invests in or is divesting from 224 fossil fuel companies.

Our law specifically designates fossil fuel companies in which we will not invest so there is already an acknowledgement in this regard on statute. I am saying that this should also apply to taxation vehicles that may legitimately be used for other purposes and that we should stipulate that fossil fuel and tobacco companies cannot use vehicles and shelf companies to avoid paying their legitimate taxes wherever they should be paid. We have led on global terms in terms of the Fossil Fuel Divestment Act. Here is an opportunity to complement that measure in terms of tax vehicles that are being exploited to avoid paying tax in other countries. This should be done in the case of fossil fuel and tobacco companies.