Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank the Deputies for their questions. I will begin with the Deputies who spoke first and will come to Deputy Boyd Barrett shortly.

I accept that Deputy Mattie McGrath is simply looking for a report on these matters. The reason I am not in a position to agree to his amendment is the issues he is calling for a report on are covered every year in the tax strategy group papers. We already do a lot of this work. We publish the matters the Deputy referred to nearly every year, including the future of income tax and the USC. That work is done by that group in an open way for the Deputy and others to consider. The reason I believe a report in the Finance Bill is not appropriate is not only because it repeats work we have already done. I also do not want to give an indication that these are policy measures I am considering implementing. I believe that would harm our economy. I have heard the Deputy speak very positively about the number of international employers located in his constituency that employ his constituents. In my view, if we give an indication that there was going to be an increase in personal tax for incomes above a certain level, I am convinced that would affect our ability to keep those jobs in Ireland. I see the level of competition that goes on between our peers, IDA Ireland, and other governments for the investment we have in Ireland. A change in tax as proposed by the Deputy would harm that. To give an indication that we are considering doing that in a Finance Bill, is not the right signal to send out.

As Deputy Doherty well knows, I campaigned in 2016 to abolish the USC. I may well have described it as an emergency tax at that point. What has happened to lead me to the view I now have is the degree to which the world has changed. I held the view in 2016 and 2017 that we would go back to a degree of economic and political normality. I did not think we would move into a world in which Brexit was going to happen and that we would see such changes in global and American politics. That has made me even more aware that small, open economies like Ireland's have to able to balance their books. Therefore, the policies I now advocate are appropriate in a world that has changed. On what I advocated six years ago as to how abolition of the USC would be paid for, one of the main ways in which we thought it could be paid for at that time was through additional growth that would happen within our economy. I will not now bank on additional growth to pay for structural changes, such as the abolition of the USC, because of the volatile and changing world we are in.

I agree with Deputy Nash's point regarding the USC being a progressive part of our tax code. It is why, in the different budgets I have done, I have made some changes to the USC but not very significant or big ones. I now accept it is an important way in which we collect tax. We will need it in the future, with the many pressures our economy and tax revenues now face.

On Deputy Boyd Barrett's point, I will see if my officials in the course of consideration of the Finance Bill have a forecast for gross trading profits. If we have it, we will share it with him. I want to return to the point he made regarding the disparity between tax paid by low-income earners and the level of tax multinational companies are paying. I will not comment on any individual company because I do not know what level of tax it pays and it would not be appropriate for me to pick it out.

Let us imagine we are in a world, which I believe we will be in shortly, where the average rate of tax for companies worth more than €750 million is 15%, because we are part of implementing an OECD agreement. I will share some figures regarding the balance between the taxation on income and the taxation on capital, which relates to the point the Deputy is making about the cleaner. Let us say the cleaner he is referring to is on €25,000 and he or she is a single person. The average level of tax to be paid on €25,000 in 2023 would be 11.3%. If the cleaner is in a company that is subject to the full implementation of the OECD arrangement, and if it is implemented in the way is currently written, the company the cleaner works for will, on average, pay tax of 15%. That is the difference.