Tuesday, 13 October 2020
Financial Resolution No. 4: Corporation Tax
What we are dealing with in these resolutions is closing tax loopholes. Deputy Doherty proposed closing a tax loophole that essentially allows for multinational companies to offset capital allowances against 100% of their profits on intangible assets, which would raise €720 million. This loophole is very similar to some of those the Government now claims credit for closing and in respect of which the Tánaiste says it was not converted. At times, the Tánaiste represents everything he claims those on the left and those he opposes represent. He spouts right-wing populism and throws out the sound bite that Sinn Féin is against multinational companies. I have many friends and family members who work for multinational companies. Neither I nor my party would take any action that would put those jobs at risk. The Tánaiste knows full well that my party has not advocated an increase in the 12.5% corporation tax rate. However, we believe that multinationals should pay their fair share and that the tax loopholes should be closed.
The Tánaiste rushed for his base instinct when he heard Deputy Doherty again advocate that a tax loophole, of which only multinational companies can avail, be closed. He got a rush of blood to the head and did not fully understand exactly what was being called for. If he did understand, as he now claims, that is even worse because I do not understand how anyone could support this loophole which allows multinational companies to offset their capital allowances against 100% of their profits made from intangible assets. This is simply about making sure multinational companies cannot avail of additional loopholes, on top of the fact that many of them do not actually pay the 12.5% corporation tax rate. Many ordinary working people out there pay 40% PAYE on their earnings and many on very low incomes also pay tax. We all have to pay our taxes, including multinationals. It is very easy for the Tánaiste to sit there and accuse my party of being against business and multinationals when he knows full well that we do not believe the 12.5% should be increased, though other parties on the left have a different view and want to increase corporation tax. We have not called for that and we have said the rate should be maintained because we want to protect jobs. However, we believe corporations should pay that rate and should not avail of these loopholes. We do not make any apology for that.
If the Government had gone for that measure and taken in that €720 million, it would have been in a better position today to reverse some of the cuts it made over the last number of weeks to the PUP, the wage subsidy scheme, protections for renters and so on. That is what the Government has done over the summer months. It wasted the summer by not taking the opportunity to build up capacity in our health service but it certainly did not waste it when it came to attacking ordinary working people and paring back their payments. It could have taken the opportunity of raising this €720 million, although not by raising taxes because that is not what Deputy Doherty proposed. He was not proposing to increase corporation tax. He was proposing to close a loophole, one of many which are similar to those the Government has now tried to take credit for closing, even though it was dragged kicking and screaming on the double Irish loophole and the others. That was not closed because of clever tax lawyers, as the Tánaiste put it, but because of the pressure that came from people in this Chamber and others outside it who told the Government that multinational companies were availing of these loopholes. The Tánaiste may not have been a Minister at the time but we got the response from Fine Gael time and again that that was not the case, that multinational companies were paying their fair share, that the loopholes did not exist and that they were somehow a figment of our imagination. They were not. We were proven right and the Government had to close some of them but it has not closed all of them. It should take the opportunity in next year's budget to do what an Teachta Doherty has advocated on some of the other loopholes.