Pearse Doherty (Donegal, Sinn Fein)

I thank the Minister for his response on the issue of Russia. On the broader issue of section 21, I will make a point on the sanctions. There are exemptions from the sanctions. This is why our exports have increased in the last while. There is a number of key areas here. Pharmaceuticals, for example, are exempt. Ore is one of the other main drivers in terms of our exports to Russia. Whether it is captured by the sanctions or not, we should not be encouraging it. I think the Minister is in that space so I will leave it at that.

On the broader issue of the foreign earnings deduction, there is an expansion here to two countries, namely, the Philippines and Türkiye. Will the Minister explain to the committee the rationale for the expansion to these two territories at this time while other territories in Latin America or Africa or some areas in Indonesia are not included? What is the rationale? As the years go on, more and more of the map of the world gets coloured in as being covered, and all the rest, and that is okay. How does the pecking order work in this? That is the first part.

The second part is that there is a bit of tightening up in this legislation that requires an employee to show that he or she has to be there for work. Will the Minister tease out what this means? It was a criticism of this provision in the Finance Bill in the past that the person did not necessarily have to be there solely for work reasons. People could, therefore, be going to destinations but not need to be there for work reasons. The 2022 report of the Commission on Taxation and Welfare recommended that the qualifying criteria for this foreign earnings deduction be reviewed to ensure that the measure was utilised in a manner where claimants were consistent with the original policy objective. It is fair to say that the original policy objective was to encourage businesses to explore other export market opportunities. In this provision there is no requirement for businesses' work to be related to exports at all. That is a problem. There is no limit to the sectors it applies to. My understanding of the section, and the Minister may elaborate or correct me if I am wrong, is that it is open to any employee in a business to be able to avail of this foreign earnings deduction and it does not matter if the business ever intends to export. That is an issue.

The welcome part, while only a small welcome part, is that the employee must now show that he or she has to be there for work purposes. For example, an employee cannot go to Dubai to enjoy the weather, work remotely from Dubai and then get this foreign earnings deduction. The employee must now prove that he or she has to be there for work-related purposes. There are also changes whereby the qualification is being taken down from three days to one day. Will the Minister specifically outline why the recommendations and concerns raised by the report of the Commission on Taxation and Welfare are not being addressed here, particularly the recommendations on limiting it to particular sectors and the need for the work to be export-related activities?