Oireachtas Joint and Select Committees
Thursday, 15 July 2021
Committee on Budgetary Oversight
Summer Economic Statement: Minister for Finance and Minister for Public Expenditure and Reform
The suggestion that the effective rate in this country is anywhere even close to 12.5% is absolutely preposterous. The Minister knows there is a serious ongoing debate concerning what "effective rate" means. However, pre-tax gross profits - perhaps the Minister might give us the figures just to confirm this point - in the corporate sector are approximately €180 billion annually, according to the latest available figures. By the way, that figure has doubled in the past five or six years. Only about half of that amount, some €90 billion, though, is actually taxed because of the application of reliefs, deductions, allowances, etc., and it is only possible to sustain the Minister's argument if we work from that lower figure. In reality, though, based on the figures for gross pre-tax profits, our real rate of corporation tax is about 4.5% or 5%. Is that not the truth of the matter?
I must challenge the Minister on the argument regarding the need for certainty and stability in the tax rate as well.
I want to turn an argument the Minister has used against us against him. Is it not the truth that he cannot promise certainty now? The rest of the world is rightly moving in the correct direction of imposing a higher minimum effective corporate tax rate on these enormously wealthy corporations which pay virtually no tax. There is a pretty much racing certainty it will head in that direction and he is holding out, along with a few other tax havens, against that. Is that not creating uncertainty now? Is he not really the one who is creating uncertainty by holding out against the inevitable? What he is doing is not just morally reprehensible, but he is creating uncertainty and would be far better joining what is a progressive move internationally to make these corporations pay something like a fair share of contribution in tax.