Paschal Donohoe (Dublin Central, Fine Gael)

I thank the Deputies for raising the points there. The reason I am extending this scheme is I believe that schemes like this play an important role in the retention of certain jobs and the individuals who do those jobs within our State. That, in turn, is part of the competitiveness of our economy that, in turn, creates the tax revenue we need to pay for that nurse or teacher and our public services. That is the rationale for it. I am absolutely aware of the need that is there within our society. I am aware of how hard it is for many at the moment but to have the resources to meet those needs, foreign direct investment in particular is very important to our economy. Within our economy and those companies, a certain number of jobs and the individuals who do them play an important indirect role in the total amount of jobs we have in our country and the total amount of tax revenue we are able to collect.

As I put this scheme in place and continue with the extension of the scheme, albeit with modifications I have made in recent years, it is important that the House is aware of the environment we are in and of other schemes that exist across Europe that we have to be competitive with regard to. I will give three examples. In Italy at the moment, for certain jobs and the scheme they have, 50% of employment income up to €600,000 may be exempt from income tax. In Portugal, they have a scheme where relevant employment income is subject to a 20% flat rate of tax. In Malta, income from relevant employment income can be subject to a favourable 15% flat rate of tax.

That is the competitive environment which we are in. There are certain jobs in certain sectors in our economy that have a disproportionate effect on jobs in Ireland and the amount of tax revenue that we collect. The tax revenue that we collect in turn creates the resources that we need to meet the needs that I am very much aware of in our society. I understand that there are equity concerns about the scheme. That is why in recent years I have made modifications to it. It is also why, every year just before the budget, I write to finance spokespeople in the Oireachtas to indicate how this scheme has operated in the previous 12 months. The nub of it is that for a small, open economy that needs a high level of tax revenue to fund public services and meet needs that are present for us, a certain number of jobs in certain sectors are really important and there is a really competitive environment around those jobs. That, in turn, is why I believe the extension of a scheme like this is merited.