Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

In approximately ten or 12 minutes. The reason I will call a vote on this amendment is that there is a cost to these tax breaks and it is an important cost. I heard Deputy Lawless refer to the fact that we need this so-called knowledge development box because it will incentivise creativity and innovation. That is the argument for it. I am wholeheartedly in favour of creativity and innovation but the question is where should the State invest public money to get the best bang for it buck in terms of innovation and creativity. Should it give its money in tax breaks to profitable corporations or should it give it to universities and invest it in education? That is the choice in reality. If coporations that are making great profits do not pay taxes we have less money for the universities, schools and education. I believe that is from where the innovation comes. It is not that I do not believe that genuinely small and medium enterprises should not get some help. I think they should get help but it should be grant help from the State.

However, I do not think that somebody who comes up with a brilliant idea in business, which is the intellectual property, and develops a product from that brilliant idea should forever and a day be permitted to pay 6.25% on all sales generated from that idea. That would not be acceptable. The company could be making an absolute fortune - €7.5 million in income and €50 million globally - but it would only pay 6.25%, not even the 12.5%, which is the lowest level of corporation tax almost anywhere in Europe. These people are already pampered. They are already paying virtually nothing. This is money that should be going into our schools and universities, which, let us not forget, have been axed.

A lot of money has been taken out of third level education and postgraduate grants and study. There are many ideas and much creativity and innovation to be found in postgraduate study, but their grants have been cut. It is apparently fine for a profitable company to make millions of euro domestically and globally and to pay 6.5% but because they are not paying more tax, there is no money to go into the universities. There is no money for postgraduate grants, there are miserable maintenance grants for students living in poverty, and so on. That is the trade-off and it needs to be called out. I am, therefore, very much opposed to this entire knowledge box package. I accept it is linked to what was passed in the Finance Bill 2015, but I opposed that too and did so vigorously.

Another point that needs to be raised is that this is about the amount of forgone revenue. Does the House remember what happened in the last budget when there was only €1 billion in fiscal space to spread around for everybody? How much extra would be available if the corporations in this country paid 12.5%? Going on existing Revenue figures, there would be an extra €4 billion to €5 billion per year if they paid 12.5%. That is not much, but the Government wants them to pay 6.25%, which is, on average, the effective rate they currently pay. Some of them pay less than 1%. Apple was paying less than 1% because of all the other tax loopholes from which these companies benefit. I ask the House to imagine if we had an extra €4 billion or €5 billion in budget 2017 because these corporations were forced to pay the actual 12.5% rate. Imagine what that would do for our universities that have been starved of money. Imagine what it would do for education. Imagine what it would do for public transport, health and the capacity to pay public sector and other workers decently. It would transform the situation. We would get major creativity and innovation from the majority of the population whose lives would be improved, whose services would be improved and whose education would be upscaled to a massive extent.

That is what is at stake in the Bill, so I do not buy this for one minute. It is another tax scam in tax haven Ireland. That is what we are - a tax haven - and because we got caught out on the double Irish, we have brought in the knowledge development box to create another mechanism for the corporations to dodge tax. In so far as the Bill is directed at small and medium-sized enterprise, as I said, they should be given grants, including start-up grants. They should be given some money to develop things in such a way that the Bill is targeted at them. However, once a company starts to make millions in profits, it should pay its taxes. What this Bill will allow it to do is, forever and a day on all sales generated from the wonderful idea, to pay an even lower level of tax than the existing incredibly low level of tax applied to corporations in this country. It is a scandal.

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