Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move amendment No. 6:

In page 20, between lines 28 and 29, to insert the following: “Report on Trans-Border Workers’ Relief in the context of Cross-Border Workers

16.The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a comprehensive report on the Trans-Border Workers’ Relief in the context of people who reside in the State and work in the North and the tax status and options of people who reside in the North and work in this State.”.

The last couple of seconds prove the nonsense the Minister is spouting on the floor of the Dáil, namely that we oppose everything. We have just supported three amendments in the Finance Bill and there will be many other sections that, as the Minister knows but refuses to acknowledge, we will support through the passage of the Bill today and tomorrow.

It does not suit the Government's narrative because the reality is it has done diddly-squat about supporting our front-line workers with bonuses. It took it six months even to get to a point where it does not have a memorandum going to the Cabinet. The Minister cannot even give a commitment today, when we are dealing with the final Stages of the Finance Bill, on whether those bonus payments will be subject to tax.

This amendment deals with another issue in the context of the pandemic. It relates to the cross-Border workers and I raised it with the Minister on Committee Stage. It should be noted that cross-Border workers face the prospect of working from home in the context of continued public health advice, both North and South, possibly into 2022, with no clarity on the future of the scheme and its operation. The Minister, like me and any other Member of the House, cannot predict how long the guidance will be in place or whether it will be reintroduced later in the year. The pandemic does not follow the pattern we may want it to follow. One cannot predict the future path of this virus, what restrictions will be needed or what guidance will be offered in any part of the island. Therefore, certainty is required for cross-Border workers who, without action, will face a financial penalty in just over six weeks as they will not be able to avail of the relief. I raised this on Committee Stage and it is a serious and genuine issue. I urge the Minister to act quickly and decisively to extend the Covid-19 waiver for cross-Border workers.

The issue of cross-Border workers was raised during the debates on last year's Finance Bill, specifically in the context of people who reside in the State but who work in the North and avail of the domestic tax relief. It was discussed again earlier last month on Committee Stage of this Bill. The trans-border workers' relief is for people who are resident in the State who travel weekly or daily to work in another country or part of this island which is another jurisdiction and who pay tax in that other country. The tax relief is not normally available for Irish residents who work from home in the State, but in light of the unprecedented circumstances due to the Covid-19 pandemic and the resulting public health restrictions to limit movement, for the tax years of 2020 and 2021 the Revenue Commissioners confirmed that concessional treatment for the relief would apply whereby if employees were required to work from home in the State during Covid-19, such days working at home would not preclude the individual from being entitled to claim this relief provided all other conditions for the relief were met. That is due to expire in six weeks. It is likely the guidance will apply in January, thus ensuring these individuals who are asked for all our sakes to work from home will not be able to avail of the relief.

The relief effectively removes the earnings from a qualifying foreign employment from the liability to Irish tax where foreign tax has been paid on those earnings and such tax is not refundable, in simple terms. The effect of the measure means that individuals who qualify for the relief will not pay any Irish tax on their employment income. Irish tax will only arise where the individual has income other than income from a qualifying foreign employment. In fairness, the Minister said the operation of the trans-border workers' relief would be examined as part of the tax strategy group papers, and that happened earlier this year. The group considered all the relevant matters, including the equity of treatment between Irish residents who pay tax in the State, the competitive position of Irish employers and the established principles of international tax. The paper concluded that "it appears impracticable from a legal perspective, in terms of taxing rights, as well as challenging from a policy perspective when having regard to the interests of the wider body of taxpayers encompassing all Irish resident employees and employers, to place the concessional treatment on a statutory footing". The tax strategy group reached this conclusion based on the issue of taxing rights, equity and competitiveness.

There are issues raised in the paper that are warranted and require due consideration, but there are other issues that fail to be addressed. Section 6 of the paper considered social insurance and noted that social insurance rates in the North are higher than those in the South. However, the example in section 3.2, which considered equity, failed to take account of employee social insurance contributions when comparing the effective tax rates paid in both jurisdictions. I believe this is a flaw that undermined the comparison and I would welcome a comment from the Minister on that.

The proposal of the Cross-Border Workers Coalition was to limit the number of days cross-Border workers could work from the State to 183 days while still being able to claim the relief. It is proposed that other controls could be introduced, such as limiting the scope of those in non-effective roles and the consideration of a salary threshold. A number of proposals have been made. Given this is the case and given what should be the importance of developing the all-Ireland economy and the move to remote working, I believe this warrants and requires further examination of this relief. Its extension is also warranted given the prospect of continuing health guidance, as I mentioned, with regard to remote working in the months ahead. I ask the Minister to accept this amendment and to go back to the drawing board and re-examine this issue which is affecting cross-Border workers, families and businesses. It is necessary that the Minister extend the relief in the context of Covid-19 and undertake work with my colleague, the Minister of Finance, Mr. Conor Murphy, in the context of the North-South Ministerial Council.

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