Pearse Doherty (Donegal, Sinn Fein)
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The point Mr. Coffey made earlier in his opening statement on how taxable income is determined is good advice to the committee. It is better than arguing on whether it should be 12% or 8%. Much of that is because of how we calculate taxable income. People may suggest taxable income which is not calculated as taxable income should be calculated as such and, accordingly, come up with different figures.

We know the research and development tax credit has increased tenfold since 2004. It trebled between 2010 and 2015 and has increased each year up to in excess of €800 million. We also know that fewer companies are availing of it than were in previous years. We have a dramatic increase in the credit with a reduction in the numbers availing of it. There is also the refund part of the tax credit where we have to pay some companies. Will Mr. Coffey give his views on this to the committee?

If this trend continues, the tax credit will hit €1 billion quickly and will probably be one of the most costly tax credits we have. With the dead weight being at 40%, it is accepted that it is within the acceptable norms of where one still gets bang for buck.

Will Mr. Coffey clarify the threshold at which he believes one no longer gets bang for buck in terms of dead weight? Does the threshold differ? Is the 40% acceptable threshold the same for a tax credit worth €20 million and for one that may cost the State €1 billion, which means that dead weight part of the credit would be €400 million, without ignoring the level of spin-off economic activity the credit generates? This is an area with which Mr. Coffey did not deal in his report to the Minister. Was that because it was outside the terms of reference and scope of the report? If the Minister for Finance was sitting in front of Mr. Coffey now asking him what he should do in terms of the research and development tax credit and asking not to be given a vague answer, what would Mr. Coffey say? Will Mr. Coffey speak to that? Yesterday I got a response from the Minister for Finance in respect of the refund element of the tax credit. He said that if it was to be ended it would save the State approximately €240 million per annum. Is that refund element unique? Is it standard across the globe? Is it a standard part of the corporation tax system?