Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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This is an issue in which I have a big interest. It is absolutely right that there should be a review of it. I do not agree with Deputy Michael McGrath's view that we should be cautious about this. We need to uncover what exactly is going on with the corporation tax rate in this country. As I have made clear to the Minister in numerous questions I have put forward and as I have made clear to his officials during some informal discussions, I am baffled as to how, on the basis of the latest available figures, we can go from having €70 billion of pretax profits to €4 billion in actual tax paid and claim that we have a 12.5% rate or, as the Minister has done in responses to my queries in this regard, maintain a claim that the effective rate is 11.9% when basic arithmetic would tell us that €4.2 billion as a percentage of €70 billion is about 6.2%. This is further confirmed, as I posed in a question last week, by EUROSTAT figures comprising detailed figures on tax throughout the European Union, to which I would draw the attention of everybody, particularly the Department. EUROSTAT refers to what it calls the implicit tax rate. "Implicit" is its word for effective tax rate. It is calculated on the same principle, namely, what are the pretax profits, what is tax paid and what is the latter as a proportion of the former. It has a 6.8% implicit rate for us, as it set out in the figures I have to hand, and not 11.9%.

It is extraordinary that the response I got to a question I put forward is that we cannot calculate the effective rate. I ask the Minister what sort of answer is that. We can calculate the effective rate for everybody else and hammer them with taxes, charges and all the rest of it but it appears we cannot get a straight answer on what is the effective rate, even though the evidence is staring us in the face that the effective rate is half of what the Minister claims it is and figures from EUROSTAT, which is not a left-wing think-tank as far as I am aware, suggests that it is much lower. It is interesting to note the various figures and our rate compared with that in other countries. I do not have all the figures to hand but Sweden has an effective rate of 21%, 22% or even higher, Britain has an effective rate of 24% or 26%, and Germany has implicit or effective rate of 17.1% according to the EUROSTAT figures. By whatever way we define it, our effective rate is a fraction of what is being charged in the rest of Europe.

There is no evidence whatsoever to sustain the argument that a low corporate tax rate is central to our economic prosperity, success and to our encouraging investment into the country. The argument is repeated ad nauseam as a mantra even though it has had no effect. We have maintained this low corporate tax rate in good times and in bad and held it as being sacrosanct, something that cannot be touched. It did not stop us getting a property bubble, it did not stop the crash and in the following five years it has not helped us to recover. I heard the Tánaiste repeat on a radio programme that our policies are about facilitating investment. Where is the investment? In reality, the investment has collapsed and there has been no recovery of that investment as a result of us protecting the corporate tax rate. If one was to do a fair study of what is going on in the rest of Europe, one would find that the pattern, probably with the exception of the Netherlands which has a low implicit rate like we have, is that the countries that have fared best and proven to be most robust and most resilient in the face of the current downturn have been those that happen to have considerably higher effective tax rates than we do. They have not suffered a collapse in investment, employment or growth. There is simply no evidence to sustain the claim that a low corporate tax rate is the key to anything and certainly not the key to their economic prosperity.

The argument put forward is that by varying or touching the rate, and Deputy McGrath seems to suggest we should even be careful about talking about it, which I find astonishing, and that seems to be the Government view as well-----