Stephen Donnelly (Wicklow, Social Democrats)
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I still have a question on the same issue. The response the Minister of State gave does answer the question to some degree, because it says what Revenue did was take €1 billion worth of mortgages, it calculated the extra tax that would be paid under the new regime and then it scaled it up to an asset base of €20 billion. The vulture funds have an asset base. They paid €40 billion for it and it is probably now worth €50 billion to €60 billion because there has been a significant increase in loan values and property values and repayment rates. But if we stick with the figures, a €20 billion asset base would give €50 million and they are not paying any tax at the moment. It means the total tax paid would be €50 million, which would be an effective tax rate of 2.5%, if one assumes they earn 10% a year which is roughly what they are earning. Basically, the way I read what the Revenue has done is it has said we will take €20 billion in loans, assume there is an annual profit on that of 10%, which is what we know it roughly is, so that would give a profit of €2 billion and that €2 billion profit will be taxed so that the State gets €50 million. That would be a tax rate of 2.5%, which goes back to the question I asked as that would not be an acceptable tax rate. Irish companies pay 30%. They pay 12.5% corporation tax, 20% withholding tax and then when they take their own dividends they pay income tax on top of that. What does the Government believe would be success when we sit down here next year or in two years’ time and say they have paid X%?