Oireachtas Joint and Select Committees

Tuesday, 16 November 2021

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach

Finance Bill 2021: Committee Stage

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

We do not often get a chance to debate these issues. We do not make any apologies about using the opportunity in the Finance Bill and the budget to do so. It is entirely legitimate. While I am not satisfied that the 15% rate that we have gone to is sufficient, it has happened because of pressure, to be clear. It was pressure from the few in this country who were willing to question the sacred cow of the 12.5% rate and from people around the world who are infuriated by the way in which these multinational corporations, in particular, are now so powerful that governments are terrified of them, and rob significant revenue from the poorer parts of the world. They are deeply unhappy with the allocation. The Minister said that we will lose revenue as a result of one of the pillars of the reallocation of revenues under the OECD process. He will also know that poorer countries are furious that they are still being short-changed by what has happened. They see it as being robbed. They are angry that a more thorough reform of the corporate tax regime did not come out of the OECD process. We make no apologies for continuously applying pressure regarding this matter.

I am an internationalist. I make no apologies for trying to rebalance the taxation system so that the wealth that our society as a whole generates flows more to those working at the bottom than to Jeff Bezos, Bill Gates and whatever coterie of multi-billionaires controls these corporations and wealth. It has to happen and it will eventually happen. This is part of the process. The Minister's argument is that we would scare the horses and be on our own, then end up like Venezuela, that it would be a disaster, and that we would lose all the jobs in Leixlip. I value those jobs. I will say that again since sometimes I am accused of not valuing those jobs. I want to see those jobs but I do not want those companies to have us over a barrel or, as a result of the fear that governments have of them, to not pay their fair share of tax.

I think the Minister was saying in his response that corporations pay a similar level of tax to lower income workers. I have two points about that, which I mentioned earlier. Workers in this country earn €130 billion and pay €27 billion in tax, which is approximately 20%. Roughly 20% of the income earned by 2.8 million workers goes in tax. Corporations have pre-tax profits of €203 billion and pay €11 billion in tax, which is 5.8%. Our argument is that the effective rate for corporations is 5.8%, which are earning much more, whereas ordinary workers earn approximately 20%, and it would be fair to make corporations to pay at least that level of tax. That would be good not just for this country but for the world. We have to start somewhere and we should start there. It is unsustainable to carry on with an economy that is so heavily skewed towards being controlled by these corporations.

I have a final point about the value of these assets. The Minister pointed to an important debate, which we never have. This is one of the few opportunities that we have to address the value of intangible assets. I would like us to have that debate, so we table these amendments, because the matter needs to be scrutinised. If I said to Revenue that I wanted to claim as a relief against my tax liability, the fact that I am paying my mum for a really good idea that she gave me, which has helped me to be a more productive economic unit and to which I ascribed a value, Revenue would laugh me out of the room. If Revenue states that a certain amount of income tax should be paid based on income earned, it would laugh people out of the room if they said that they are paying their mum for a good idea that she had which made them more productive, and that it is an intangible asset, which is a cost that they will claim against their tax. That is what the multinationals are doing. They are laughing at us when they ascribe astronomical values to these intellectual property assets. I am not saying that they have no value but there needs to be a hell of a lot more scrutiny into how they are valued and whether they can be valued such that profits that were €200 billion then become €111 billion. There is a problem. They are exploiting these categories of tax relief. Everybody knows it but we are not really doing anything about it.

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