Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank all of the Deputies for the points they made. I am mindful of Deputy O'Brien's point about the degree to which the cost of this scheme has increased. That is one of the reasons we will have a review of the operation of the scheme next year. When I was presented with the figures on the operation of the scheme for the most recent year I decided on the grounds of tax equity that it had to change. Bringing in the cap at what is still a high level of income strikes the right balance between attracting and retaining jobs here in Ireland and addressing the fact that the level of relief available to somebody on an income above €1 million was too high. That should change.

I will cite some figures as an example. Someone with an income of €6 million who availed of the scheme would not have to pay a further €700,000 in income tax. Moreover, the relief available to somebody on an income of €9 million would be in excess of €1 million. That is not appropriate and for this reason, we are introducing a cap. It is important to take on board Deputy McGrath's point that if we are to stand over this scheme, we must be able to demonstrate its effect on the creation of jobs. However, we also have to address equity issues for other citizens who are on a high income but are not participating in this scheme and, just as important, for all the low and middle-income workers who are indirectly contributing to the cost of the scheme by forfeiting income tax from very high-income participants. It is for all these reasons that I am making this change.

To answer Deputy McGrath's questions, he is correct on the issue of timing. Participants with an income in excess of €1 million who are already on the scheme will have the opportunity to continue to benefit from this scheme for a further year up to January 2020. However, the scheme will change for any new participants from 1 January 2019. In answer to the question about the effect of this programme in creating and retaining jobs, my Department's report will look at this issue, which will be among its terms of reference. The review will examine the performance of the programme in meeting its objectives, including in attracting skilled individuals and key decision-makers to Irish-based operations.

In regard to the issues that Deputy Burton raised, I believe there is a role for a programme such as this. We have consulted the State agencies that are involved in this work on our behalf. In certain sectors of the economy, certain individuals are highly mobile and if they are located here, they can play a role in the creation of additional jobs. There is a role for a scheme like this, but in the absence of a cap, the scheme created issues of tax equity that needed to be addressed.

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