Dáil debates

Thursday, 5 July 2012

5:00 pm

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)

In all the discussions which have taken place to date Ireland has never opposed the principle of a financial transactions tax. However, we have pragmatic reasons for believing it might not work in all circumstances. Our first position is that if it could be introduced through the G20 at a global level, we would be in favour. Our fall-back position is that if it could be introduced across the 28 countries in the European Union - Croatia acceded to the Union four days ago - this would also be acceptable. The difficulty is that in Dublin there are 33,000 people working in the industry which is responsible for 10% of GDP. If a tax on financial transactions is introduced in Dublin and not in London which is only an hour away by aeroplane, there will be dislocation. In the circumstances in which we find ourselves, we cannot take the risk.

The nine countries forging ahead in this regard are moving away from what is contained in the Commission's paper and considering the imposition of stamp duty on financial transactions. Ireland already imposes stamp duty of 1% on these transactions, while the United Kingdom charges 0.5%. Current thinking seems to be leaning towards widening the base and imposing stamp duty on transactions other than those which relate to dealings in shares. There also appear to be moves afoot to deal with the problem to which the Deputy referred, namely, high speed computerised transactions which are certainly placing systems at risk.

We will see what emerges and I will report fully on the matter, either in the House or at the joint committee. We will then make a judgment on the matter. Even though we have opted out of joining the other nine states which are moving ahead, there is nothing to prevent us from joining them at a later date if they develop a tax which is acceptable to us. We will see. With the way our economy is and our high levels of unemployment, the main important matter is to preserve the financial services industry Ireland, especially in Dublin, because it is one of the sectors expanding at present.

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