Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I will address a number of the points and I will return to that specific point. Deputy Boyd Barrett asked about the amount of the cost that is accounted for by the larger companies. In the publication last April, the only category of large companies, let us say, is those with 250 or more employees. Of the €753 million, €559 million of it is claimed by those 200 companies. Deputy Boyd Barrett has referenced the iPhone a number of times. It also comprises companies that produce vaccines, pharmaceuticals and medicines, to name other examples. It is important to underline the strategic importance of this credit for Ireland. We have made the policy decision to sign up to pillar 2, that is, to increase our corporation tax rate. If we did not make the change to the credit, it would represent a dilution of the benefit of the research and development credit because it would effectively be now regarded as income - as a grant - rather than being a credit. That would unquestionably reduce Ireland's attractiveness relative to other countries. Other countries are going as far as they possibly can to support research and development activity. We have been very successful in winning FDI. Many of the companies the Deputy referred to employ tens of thousands of people in Ireland. I have met many of them over recent months and years, and this has been a key issue for them in terms of attracting and retaining that investment into Ireland and making sure that we are competitive. I believe it is the right decision. I point to the other important element here, which is the doubling of the first-year instalment. This is designed for smaller claimants because it will be proportionately of much more benefit to them. That is an important overall point to make.

On the expenditure side, by means of comparison, data for 2021 from the Department of Further and Higher Education, Research, Innovation and Science show that Government directly funded €952 million of research and development. That is separate to the tax credit and on the expenditure side, which shows the level of priority being afforded there as well.