James Lawless (Kildare North, Fianna Fail) | Oireachtas source

I wish to advance on the comments of the previous speaker, Deputy Boyd Barrett. While I cannot agree with the principles he outlined, I see absolutely the need to invest in universities, education, third level, fourth level, post-doctorate research and the programme for research third level institutions, PRTLI, as I have said many times in this House, and to continue the success of institutions such as Science Foundation Ireland which contribute to and fund all these activities. PRTLI is one particular body I have spoken about because it has been starved of funding, unfortunately, falling back to €14.9 million this year. I have been visiting universities this week, and they are struggling on the back of this reduction. They need investment in technology, laboratories, libraries and the bricks-and-mortar infrastructure needed to advance, sustain and house research and development.

There are other ways of going about this. Deputy Boyd Barrett's amendments and the principles he has articulated are a wider observation. Peculiarities in the tax code are a wider picture, as he has alluded to regarding the Finance Bill 2015 and subsequently. I am concentrating my amendments and my focus on the particular measures in this Bill, which I understand to be aimed at the SME sector. Investment in education and encouragement of enterprise and endeavour through the tax code are not mutually exclusive. It is possible to invest heavily in education to create highly skilled graduates who then go on to invest, and this should be the case. However, we must understand that some people wish to move on from the academic world and into enterprise, and they should be rewarded and encouraged for doing so.

It is also important to observe that not every cent of revenue generated by these firms will be subject to the 6.25% rate. The activities derived from the invention, certified by the office, are those in which the credit is claimed upon in that particular year. It is not an ongoing stream. It is not, to my mind, a device for repeated, perpetual tax avoidance. It is a measure to encourage and incentivise the SME sector. I have met those involved in the SME sector and they are not all by any means corporations, whether large or small. In fact, I have dealt with sole traders and have met individuals in the sector. They are not even all high-tech. There are some extremely talented, innovative people across all sectors, including in the trades, who are inventing things using their own intellectual capital. This is something we should reward and focus on, and we should do so through the tax code.

There is merit to the arguments and concerns about the wider tax position and how clever corporations can hedge and marry multiple tax tools to pay a low effective rate of tax. However, as I see it, they are not applicable to this Bill and these measures, and for that reason I will not be able to support the amendments.

See this speech in context