Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The Minister of State says the Government is looking into it, taking it seriously and all the rest of it. I accept that more work has been done on it. One might argue that this has happened as a result of the big international movement in this area and the questioning, for the first time, of the consensus around low corporate tax rates by some people who have come to the Oireachtas. The combination of those developments has forced some discussion and scrutiny of these arrangements. I ask the committee to consider this proposal in the context of other measures that are being imposed on ordinary citizens at the moment. Ordinary citizens are not given a six-year timeframe in which to readjust to possible tax changes and do not seem to get the benefit of the fairly privileged access to the Department of Finance and the Minister that seems to be enjoyed by the big corporations. It has been suggested in reports that when the Minister, Deputy Bruton, was in the United States recently, the Government was busy telling these big multinationals not to worry and reassuring them that they will not have to pay much more tax. The Government is giving the multinationals six years to adjust while this is phased in. It intends to consult them all along the way. Not only are these companies being given huge reassurance, but they are essentially being given advance notice to prepare themselves for any possible adverse effects of the changes in the corporate tax regime as well. This contrasts with how ordinary citizens are treated when they are told "here is your water tax and your this, that and the other - pay it". They are not given six years to assess how it might affect them.

Having mentioned that contrast, I would like to focus on the need to thrash out seriously at some stage all the headings under which €70 billion in gross profits comes down to €40 billion in taxable profits. To me, that is a three-card trick. The ordinary citizen does not get the sort of massive tax breaks enjoyed by those who claim tax breaks on the basis that they have kids, they have to put a roof over their heads, they need lawnmowers to mow their grass, or they have a car. I know ordinary citizens get some tax breaks in these areas, but they do not manage to reduce their gross income by nearly half - I refer to their taxable income - by the time taxes begin to kick in. The level of allowances and deductions being given to corporations enables an enormous sum of gross profits to be reduced to a taxable figure of €40 billion. One cannot help feeling that this facilitates pretty significant tax avoidance. Some of this revolves around things like company cars and extravagant management expenses which, to my mind, should not attract tax deductions. Critically, it is clear from what is available to us from Revenue, and on the basis of an obvious and reasonably fair assumption that the companies making the bulk of the profits are the multinationals, that the key area in which this is happening is the area of intellectual property. That is where it is happening. We have whistleblowers and everybody. All sorts of people have analysed it. It is a fact that they are charging astronomical figures for the royalties for the right to use certain intellectual property. They seem to adjust the charges or royalties they pay for that intellectual property conveniently to cover the vast amounts of profits they make so that those profits are then not taxable.

To my mind, that is just a scam staring us in the face. When the Minister of State states that we have to be competitive with other countries making tax offerings to these companies, he cites Luxembourg, the Netherlands and the UK, which, frankly speaking, are all the tax renegades of the European Union. Do we have to compete with the tax renegades of the European Union? We have just discovered that some big Irish companies are going to Luxembourg to avoid tax. These are the people with which we are competing. Could we not compare our tax system with the tax models in the Scandinavian or central European countries rather than competing with the tax renegades of Europe?