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

Exactly. The Government has, under pressure, had to move towards a higher nominal rate of corporate tax.

It fought hard to minimise the extent of any increase as part of the OECD and G20 process for raising corporate tax, particularly railing against the idea that there might be any latitude to go beyond 15%. I do not agree with the Government's position on that because I think it is immoral that corporations pay a lower rate of tax than workers who work on the floor within those very corporations or workers generally. The working population pays at least 20% tax in total, if not quite a considerable amount more, on their income. The average is probably somewhere between 20% and 30%. Corporations are paying a hell of a lot less. It is not just the nominal rate. While I welcome the increase to 15%, I think it should go higher. The headline rate should be at least what a worker is paying on average. That is only fair.

Notwithstanding that debate, I am also concerned it is all immaterial if there is such a range of reliefs, deductions and allowances from which corporations can benefit and exploit that the actual amount of tax corporations pay is considerably less than that. We discussed some of this earlier but it is worth responding to some of the Minister's earlier comments about the difference between the figures for gross profits of corporations and taxable profits. Taxable profits allow the Government to say there is an effective rate of approximately 10.3%. I think that was the figure the Minister mentioned. The Government can say that because corporations can go from €203 billion in pre-tax gross trading profits to approximately €100 billion. I am looking for the figures now, although I quoted them earlier. That happens through the use of a series of allowances, deductions and reliefs. In our budget submission, we highlighted some of the main headings under which this is done and they are detailed in a document Revenue produces every year, Costs of Tax Expenditures (Credits, Allowances and Reliefs). Some of the main headings under which corporations can write down their taxable profits are "capital allowances", "intragroup transactions", "company reconstructions and amalgamations", "losses, including capital allowances, brought forward", "group relief", "research and development", "tax credit" and "knowledge development box", to name some of the big ones. The ones I find most interesting are the intragroup transactions and the capital allowances. Those are the biggest. They are staggering. They are described accurately in Revenue documents and tables as "costs to the Exchequer". Intragroup transactions, as a cost to the Exchequer, amounted to €16 billion. It is an absolutely stunning figure.

We do not have a capital allowances figure for 2019, although the Minister may have that figure and I would be interested to know if he does. For 2018, the cost to the Exchequer of capital allowances was €9 billion. That is quite extraordinary. Taken together, those two costs to the Exchequer alone amount to €25 billion. It also means that multiples of that profit was not taxed. How it that happening? If it is an intragroup transaction, that gives us a fair clue. That is how one subsidiary of a big multinational gets a Revenue figure, its pre-tax gross trading profits, which might be €1 billion, and says it does not have €1 billion of profit because it owes €900 million to a subsidiary of the corporation for the use of intellectual property. It does not then have €1 billion of profits to tax, it has only €100 million. What is actually a profit generated from sales by that company then becomes a cost which they can claim against their taxable profit.