Joan Burton (Dublin West, Labour) | Oireachtas source

One area of taxation of the types of sectors about which we are talking is a financial transactions tax, which would have a massive impact on poorer countries around the world. One of the side effects, perhaps unsought, of the type of tax regime Ireland and Luxembourg have developed is that poorer countries are relieved of their tax earning capacity in respect of raw materials. The Minister will know this because a number of years ago, he arranged to meet representatives of Oxfam, for which I was grateful. I acknowledge he has provided for changes to transfer pricing in the legislation. It is not yet clear how they will play out but I acknowledge that he aims to make the system fairer.

On transfer pricing, there has to be some way, in a globalised, financialised world, of ensuring that people who earn a great deal of money will pay tax. Otherwise, people who have no money, who are at the bottom of the heap, will have no income, which means their basics in life will be unavailable and unaffordable to them. That is why the OECD-type approach is the best one, accompanied by good governance and high-quality taxation systems. The Minister is working on the Augustinian principle of, "O Lord, make me tax effective, but not yet." We will end up paying, as we already do, large amounts to countries such as Italy, which has located various types of digital taxation in the country. That means it can take into account, for instance, activities and taxes that companies have paid, such as on labour. Ultimately, such countries can come back and seek what we could call a refund from us, which they increasingly do.

It is a mug's game to stick our head in the sand and deny what I have outlined. The Government has to be able to show some progress on some areas.

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