Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move amendment No. 78:

In page 93, between lines 18 and 19, to insert the following:

“Report on the treatment of capital gains tax with respect to worker-owned cooperatives

39.The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the treatment of capital gains tax in instances where a company or shares of a company are purchased by a worker-owned cooperative, and options to amend the capital gains tax regime to promote worker-owned cooperatives and employee ownership.”.

This amendment also relates to capital gains tax and workers' co-operatives. The concept behind this is ensuring that we can support worker-owned co-operatives. This amendment requires the Minister to publish a report on CGT in instances where a company or shares in a company are purchased by a worker co-operative and to consider options to amend the CGT regime, including exempting such purchases from CGT in order to promote employee ownership. This is consistent with section 7 of my colleague, Senator Gavan's, Worker Co-Operatives and Right To Buy Bill 2021, introduced on 28 June this year. We are committed to developing an economy in which workers have a greater share of ownership through work co-operatives. These are businesses in which workers of the enterprises own at least 51% of the enterprise shares. In this structure, ownership and labour work together: by giving workers control, more is given to the communities and so on. It helps retain wealth at local and regional level. It is a more sustainable way. They perform well at meeting local employment needs and there are numerous advantages for them. Work co-operatives are more likely to pay the living wage, have lower pay differentials and so on.

In 2005, the Scottish Government established the state agency, Co-operative Development Scotland, which is a subsidiary of Scottish Enterprise. It was tasked with the responsibility of developing Scotland's co-operative sector. Between 2005, when this agency was established, and 2012, the sector experienced modest growth. This was, however, followed by a substantial 300% increase in the number of worker co-operatives in Scotland. The number of businesses has gone from 30 to 100. Among the measures introduced was an exemption from CGT up to a certain threshold where the sale of the controlling interest in the company was made to an employee ownership trust or worker co-operative.

This will not change the way we do business here or change enterprises dramatically. It is a model worthy of being looked at. A jurisdiction not far from us has looked at this issue and brought forward a taxation proposal to encourage worker co-operatives. Not only is it certainly worthy of consideration, but it should be introduced and monitored to see if this would indeed have a positive impact on the retention and growth of companies.