Mr. Eamon Murphy:

I thank Deputy O'Brien for the question. As Dr. Healy said, this document, Budget Choices 2020, is on the website and I believe a copy was sent to all committee members. Pages 4 to 7 deal with our proposals on taxation. Pages 5 and 6 deal with many of the issues that the Deputy mentioned. He hit the nail on the head by mentioning the need to broaden the tax base and to do so in a sustainable way. Corporation tax has a substantial role to play. Most of the revenue raising proposals that we have made in that area are about reform rather than increases. It is well documented that several large multinational companies based in Ireland are paying effective rates of corporation tax well below the headline that we have set out of 12.5%, which is such an article of faith in Irish politics. One of the proposals that we made in our budget submission was to set a minimum effective corporation tax rate of 6% to ensure that those corporations are making a fair contribution to the Exchequer.

The Deputy raised the feasibility of allowing banks to continue with what is effectively a corporation tax holiday. We believe that there should be a limit to the ability of corporations to carry their losses forward, limited to ten years, and that the cap on that should be returned to 50%. We are being fair about that. We acknowledge that there is a need to remove the bank levy if that is to be the case. That would see upwards of €100 million being raised in 2020 alone. The extent to which banks have been allowed to roll those losses forward effectively penalises the Irish taxpayer twice for the actions taken by the banks during the 2000s. These institutions would not exist in the current format if it was not for the taxpayer and they should now start to make a proper contribution to society. Overall, we think that Ireland needs to take a leadership role with regard to the international moves that have happened over the last few years, including setting minimum effective levels of corporation tax and creating a consolidated corporation tax base. We need to get ahead of what is really an inevitability. There is a time-limited aspect to the current system of Irish corporation tax. We need to get ahead of that and take a lead on setting a Europe-wide minimum to create a fairer system.