Seán Fleming (Laois-Offaly, Fianna Fail)

I welcome the opportunity to speak on the Finance Bill 2012. Aspects of the Bill which particularly affect the public are the provisions for VAT increases, excise duty, carbon taxes and mortgage interest relief. The budget also introduced the household charge and changes to capital gains tax and DIRT tax.

Before addressing these issues, however, I wish to speak to the provisions of the Bill on business related matters. I welcome large portions of the Bill, although my party will be tabling amendments in respect of certain provisions. Its impact can be described under four categories. The research and development tax credit amendments mean companies will now have the option of using a portion of their credits to reward key employees involved in this activity. Essentially, they can allow employees to use the company's credit against their own tax bills. The special assignment relief programme is targeted at people who come to work in Ireland after spending at least five years outside the country. Certain returning Irish people will qualify for the programme. The foreign earnings deduction scheme will apply to employees who spend ten consecutive days working in Brazil, Russia, India, China or South Africa, providing they spend at least 60 days in those countries over a 12-month period. The deduction will be paid by way of a rebate towards the end of the year.

I welcome the research and development tax credit scheme. It will be important for small businesses and start-up companies. I have not studied the entire Bill in detail because, at 279 pages, it is the most voluminous Finance Bill in several years. I am not saying it is the best, however. The credit could ultimately be worth 37.5% if one adds the 25% allowance for research and development over previous years to the 12.5% corporation tax. Much of the research activity in smaller businesses is done by a limited number of key individuals who bring value to companies. As start-up companies in particular may not be in a taxable situation, the research and development tax credit is of no benefit until they become profitable many years later. The new scheme will help businesses with their cashflow in early years by offering the benefit to employees. It would also make it feasible to attract certain key people who might not otherwise move to Ireland. I understand there is increased provision for companies which contract out some of their research work.

The outbound assignee scheme is welcome if it helps exports to the countries concerned. If Fianna Fáil was still in government we would probably introduce it for a limited number of countries to see how it works before rolling it out to other countries with which we have double taxation agreements. However, the minimum and maximum presence requirements are somewhat bitty and I would like to see a more simplified way of administering the scheme. When I hear about people claiming tax relief based on the number days they live abroad, I am reminded of the Minister for Social Protection, Deputy Burton, who stood up time after time to raise the issue of people who were not paying taxes in Ireland on the basis of non-residency here and were jetting in and out of the country. They were allowed to be here for a certain number of days in a year.

The Deputy wanted to know whether customs officials or gardaí at airports, at private airfields and on the Border were checking them coming in and going out. I could write the script - I heard it 1,000 times. I hope the Minister is not as silent when it comes to this or maybe she will accept there is a more sensible practical middle ground.

The intention is correct but I believe the Bill goes into too much detail. I would simplify it and withdraw some of the nitty-gritty rules. A person could be on a ten-day sight-seeing trip to Brazil and decide to come back a day early in order to avail of more suitable interconnecting flights. I do not know how these days will be counted. I am not saying it will be abused but somebody will say it will be abused. They are generally large companies and will have good operations in place.

Some companies claim some of the mobile technology applications will probably prove where the person is by use of his or her dedicated company mobile telephone. It will show from what country the calls are being made. Nowadays there are ways of almost - I hate to say it - electronically tagging employees when one knows the location of their mobile phones.

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