Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 161:

In page 66, between lines 2 and 3, to insert the following: “Report on Research and Development Tax Credit

55. The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the Research and Development Tax Credit, its distributional impact across indigenous and foreign-owned multinational firms, and options for its reform to support indigenous enterprise, research and development.".

This amendment proposes a report on the research and development tax credit and its distributional impact across the indigenous and foreign-owned multinational firms and options on its reform to support indigenous enterprise research and development.

The amendment is about the research and development tax credit and it is a central plank of our tax policy, of which Sinn Féin is extremely supportive. For a number of years I argued the research and development tax credit should be increased for small and medium enterprises to 30% and reduced for other businesses to 20%.

The increase in the research and development tax credit for micro and small businesses was adopted in last year's Finance Act, and I welcomed that change, having called for it in a number of previous years. However, we know the research and development tax credit is disproportionately availed of by multinationals and large corporations. The figures show that quite clearly. We saw the change last year and we will see how that has an impact on distribution in future years. This amendment calls for options to be brought forward to look at and reform our research and development tax credit regime.

Given the changes in global tax policy, it is clear our industrial policy must also change. There must be measures to encourage high value growth in research in our domestic economy as this will be more crucial than ever before. This amendment does not call for a change, as such, but it seeks a report into the area of tax policy that could further this end.

A number of reports on this have been done in the past and the Minister accepts and acknowledges the need for this area to be kept under constant review. As I stated, there were changes last year to supports for SMEs and we need to continue that trajectory. It would now be timely to have a further report, given the data that will come through concerning last year's change, on how the research and development tax credit could be further strengthened if necessary.