Peter Fitzpatrick (Louth, Independent) | Oireachtas source

I do not like starting a debate by being negative but it was announced that there will be 85 redundancies in PayPal between Dundalk and Dublin, which is very bad news. I am a sitting TD in Dundalk. PayPal is a top company and good employer that still employs a lot of people. I do not know how many times over the past number of years we have had phone calls to tell us this is the last time this will happen.

People who work in PayPal in Dundalk and Dublin had opportunities over the past number of years to switch jobs but did not do so because PayPal said it was here for the long haul and people believed in it. These people have families, mortgages, kids going to school and everything else. It is dreadful. I am worried about the future. I do not know whether PayPal was in contact with the Minister of State, but it is definitely due a phone call because this country has done absolutely everything for PayPal. The IDA has bent over backwards for it, along with the Minister's Department and everything else.

No matter what PayPal looked for, PayPal got and it has turned around and now 85 people are being made redundant. It is not fair. There were redundancies some years ago and PayPal said that was it, but it created jobs in other countries. Given the amount of funding and commitment the Government has given to PayPal, we do not deserve that and the 1,500 people employed by the company do not deserve it either. A lot of people living all over Ireland are worried and sceptical and wonder what the future holds with PayPal. Rather than coming from the sitting TDs in the area, it would be nice for the company to get a phone call from the Minister of State's Department. PayPal keeps telling us the same thing, namely, that it is the economy or this, that or the other. The Government has pumped a fortune into PayPal and we deserve something back. Those affected are high spec. PayPal has said that it chose the area because of the people in it who are top spec, there is Dundalk Institute of Technology, DkIT, and everything else. It is a very worrying time. I would appreciate if the Minister could speak to local TDs in the area and contact PayPal to see what it says. What has happened is disappointing. It is a good employer and pays well but the redundancies have put a bad spin on that. If the Minister of State could do something about this, I would appreciate it.

The digital services levy will extend Coimisiún na Meán’s power to raise a levy under section 21 of the Broadcasting Act 2009 to cover its new functions under the digital services regulation and the terrorist content online regulation in compliance with the EU Digital Services Act. The digital economy has transformed how we live, work and do business. Companies providing digital services, such as social media platforms, online marketplaces and search engines, have seen exponential growth in their revenues. However, this growth has not always been accompanied by a corresponding contribution to the economies from which they derive their substantial earnings.

Traditional business models are taxed based on physical presence and tangible assets. In contrast, digital services companies often have a limited physical footprint in the countries where they generate significant revenue, resulting in a mismatch between where economic value is created and where it is taxed. This Bill represents a significant step forward in how we regulate and benefit from the digital economy. It is not merely a tax measure, but a strategic initiative to ensure that the growth of the digital economy translates into tangible benefits for our society and economy. These levies will apply to revenues generated from specific digital services, including online advertising, data transmission and intermediation services provided through digital platforms such as social media, search engines and online marketplaces. The Bill's provisions will help level the playing field between digital and traditional businesses, fostering a more balanced competitive environment.

The funds generated from this levy will be directed towards covering Coimisiún na Meán’s new functions as the digital services co-ordinator under the digital services regulation and as competent authority for the terrorist content online regulation. Coimisiún na Meán is currently confined to levying certain cohorts of service provides, therefore this amendment is required to extend the types of service providers by two additional categories of providers that must comply with the digital services regulation and those that must comply with the terrorist content online regulation.

It is important to note that the Bill is not an isolated effort, but part of a broader and co-ordinated international response to the challenges of digital taxation. The Digital Services (Levy) Bill 2024 aligns with global efforts to address the taxation challenges posed by the digital economy. Many countries are adopting similar measures, and this Bill positions us as a leader in this international movement.

However, I and the Regional Group of TDs have remained steadfast in our commitment to advocating for the prosperity and growth of SMEs in our towns and villages to ensure that the voices and needs of small business owners are heard. Therefore, it would be remiss of me to not mention some concerns regarding the levy. One of the primary concerns is that digital services companies may pass the additional costs of the levy onto consumers. Many SMEs, including rural and regional businesses, have already been hit by a wave of cost drivers. This levy could result in higher prices for services such as online advertising, digital subscriptions and e-commerce transactions, ultimately affecting consumers' wallets. If this happens, there is a risk that SMEs might be indirectly affected. Larger companies might reduce their spending on digital advertising or other digital services, but SMEs rely on digital services for their marketing and operations, thereby negatively impacting these smaller businesses.

It must also be considered that digital services providers might perceive the levy as a hostile move and could reduce their investment in the countries that impose such levies. This might lead to reduced job creation, slower technological advancements and decreased overall economic growth in those regions. Several digital companies in my constituency of Louth and eastern Meath have expressed concern that they might be subject to multiple levies from Coimisiún na Meán under section 21 of the Broadcasting Act, as well as having to pay European levies imposed in multiple jurisdictions across the EU, while some are arguing that the levy could stifle innovation by placing additional financial burdens on companies that drive technological advancements.

The primary focus of the Bill is on extending Coimisiún na Meán’s power to raise a levy under section 21 of the Act to cover Coimisiún na Meán’s new functions, while also amending the Digital Services Act 2024 to introduce a power for the CCPC to raise a levy for its new functions under the digital services regulation. However, it is equally important to ensure fair taxation and to emphasise Government support for the digital economy. By addressing the tax imbalance, we can foster a more competitive environment that encourages innovation and growth.

While the Digital Services (Levy) Bill 2024 seeks to address significant issues in the taxation of the digital economy, it is essential to carefully consider and address these potential negatives. We must strive to balance the need for fair taxation with the potential impacts on consumers, businesses and the broader economy. By doing so, we can create a more equitable and sustainable framework that benefits all stakeholders in the digital economy.

In an era where digital services are increasingly central to our daily lives and economic activities, it is imperative that our legislative framework keeps pace with these changes. Investing in digital infrastructure is essential for enhancing connectivity, especially in under-served and rural areas. By improving access to high-speed Internet and digital services, we can provide more constituents with opportunities to participate in the digital economy. Supporting digital literacy programmes will equip our workforce with the skills needed to thrive in a rapidly changing job market.

To conclude, the Digital Services (Levy) Bill 2024 is forward-thinking and necessary legislation. It ensures that the rapid growth of the digital economy translates into meaningful contributions to our society and economy. The Bill’s effectiveness relies partly on global co-operation. We remain committed to working with our global partners through forums like the OECD to develop cohesive and comprehensive international tax rules for the digital age. By passing this Bill, we take a decisive step towards a fairer and more equitable tax system that recognises the realities of the modern digital world.

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