Shay Brennan (Dublin Rathdown, Fianna Fail)

I move amendment No. 22:

In page 55, between lines 21 and 22, to insert the following:

“Assessment of tax measures to incentivise business investment in digital transition 40. The Minister shall, within six months of the passing of this Act, lay a report before both Houses of the Oireachtas, on an assessment of introducing tax measures to incentivise business investment in digital transition.”.

According to the European Commission, only 34% of Irish SMEs have achieved an advanced level of digital intensity. To define advanced level, it means they are substantially using artificial intelligence, data analytics or sophisticated cloud computing. Further to that, the ESRI has noted that just 39% of Irish SMEs are currently investing in digital transition in any way. That is a concerning gap and one that is only going to grow as technology, such as AI, automation and data-driven systems become more prevalent and more integral to competitiveness.

We need to equip our SMEs to adapt, otherwise we risk eroding productivity, export capacity, long-term resilience and all that stuff. That is what this amendment is doing. It is seeking to encourage an assessment of what new measures can be brought in to accelerate the digital transition. For example, one option would be accelerated capital allowances, allowing companies to write-off 100% of qualifying expenditure in year one rather than over eight years. That is done in a number of other areas, and that can be applied to AI, cybersecurity, digital infrastructure and even staff upskilling.

Another potential option would be the expansion of the R and D tax credit. We discussed that earlier but it could be extended beyond areas of pure research and applied to areas that might involve adopting and integrating new technologies would improve business models and processes. The Future Forty report published yesterday stressed the need to increase productivity within the economy. An obvious way to do this would be by supporting investments in the likes of AI, cloud systems, cybersecurity, etc.

I have left the amendment deliberately not prescriptive and I ask that we assess the best options going forward.