Peadar Tóibín (Meath West, Aontú) | Oireachtas source

It is fair to say this and the previous Government have been pulled kicking and screaming with great reluctance and resistance into reforming corporation tax in recent years. I remember talking to the Minister’s predecessor, Michael Noonan, about the BEPS process ten years ago and the reluctance the then Government had initially in regard to that. Ireland has suffered significant damage historically from the international reputation that exists around the tax haven status Ireland has had in the past. Bargain basement corporation taxes have a number of negative effects. Obviously, they are one of the key tools of tax injustice, which funnels money from the many to the very few. One of the biggest crisis in the world is the concentration of wealth in the hands of so few individuals in terms of the number of billionaires in the world, and tax injustice is one of those tools.

It is important we discuss the fact low corporation tax is considered in economic terms a strategy to allow for Third World countries, typically, to improve their economies in a short period of time. It is very seldom that low corporation tax is seen as an end strategy. Usually by the time foreign direct investment comes into a country and helps it develop, that country can develop more of an indigenous sector which is stronger. That is not to say foreign direct investment is not important, attractive and needs to come to this country and we need tools to attract it, but foreign direct investment, like any investments, is also based on issues such as goods, value, inputs, access to markets, good skills, good communications technology and good transportation infrastructure. Investment in those allow for Ireland to remain an attractive place to do business in future despite the increase in the corporation tax. There will be a need for Government to focus on making sure those other competitive advantages are worked on significantly in the next while.

I do not know how the €2 billion cost is quantified by the Department. How does the Department come to the understanding of a €2 billion cost? Is it because of taxes that would be paid in jurisdictions in which the income is earned rather than in the states in which the company is located? I know the Minister approached that question slightly in the last engagement.

I agree with the previous speaker that it is a significant break with the policy this country has had that it would be 100% sovereign when it comes taxation issues. Transposing a European directive on taxation is a significant break. There is no doubt, like any of these breaks, it is the start of a new process in which the European Union is likely to have or at least demand more influence on our taxation policy.