Peter Mathews (Dublin South, Independent) | Oireachtas source

Will the Minister explain in simple and understandable terms what the anti-avoidance measure in Financial Resolution No. 4 amounts to? Manufacturing businesses, by definition, are risky. They often require large investments in plant and machinery, which are not so bankable. From a businessman’s or businesswoman’s point of view, he or she may need the backing of high-earning wealthy individuals who are prepared to make an investment and to provide a shield for what would otherwise be a large tax bill. Sometimes it is a way of raising working capital for plant and machinery for businesses that may otherwise not get it.

It is not good enough just to say that because the measure is anti-avoidance, it is good. Sometimes it is not good. The avoidance of taxation is sometimes seen as a business philanthropy rather than a social philanthropy by people of enormous wealth. They know they are going to lose the money. Many film investors know they will lose their investments but they can see they can soften the blow of that write-off by having a slightly reduced tax bill. I would refrain from the knee-jerk reaction of thinking that anti-avoidance measures are always good. In the Budget Statement, the Minister said this would have a nil effect on the Exchequer. The Department should check with businesses that have attracted passive investment from wealthy and high-income individuals to find out what would have occurred if they had not raised that capital.

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