John McGuinness (Carlow-Kilkenny, Fianna Fail) | Oireachtas source

I welcome this debate. I hope it is just one step in an analysis that should be undertaken by the Oireachtas of how we arrived at the point where this country lost the case. Now we are collecting billions of euro in unpaid taxes. Equally, I ask that the Oireachtas finance committee be privy to the thoughts of the Government as to how it intends to spend this money. It is important in respect of the collection of taxes that we in this House remember how difficult it is for individuals and businesses to earn a profit to pay a tax. We should apply the same diligence and rigour to the spending of that money as they do in creating the tax in the first place.

Aggressive tax planning, which is what I would term this, does not mean you do not pay any tax at all. The Revenue Commissioners have a central role in auditing the returns of individuals and companies. They often give their rulings as to how a particular tax code is to be interpreted. That is important to remember. I understand the desire to score a political goal here and there but we should not take our eye off the administration of the State and how it is being conducted.

In the current edition of the Irish Farmers Journal there is coverage of the case of Dermot Tobin, who paid taxes in the name of his farm's company. He was then audited by Revenue, who took a different view on it and forced that man and his family to go through the courts to defend their position and what they had done in paying their tax. His family was left to carry the burden of the cost of legal advice and representation in the courts. That give us the comparison between a very large company like Apple and a single individual like that farmer and his family. I believe that farmer was treated very badly and forced to defend a position when really Revenue was trying to set a bar and test a case. Surely he is entitled to some support and recognition for being put through the courts on that basis.

The next discussion we need to have is on the billions of euro that are now available to the State to spend because everyone and anyone in political parties and outside have a view on how that should be done. I believe that their views, our views, should be heard. We should understand clearly where the Minister for Finance is heading with the spending of this money. However, a good portion of it needs to be ring-fenced and put to one side. Whatever remains should be applied to solving some of the major issues that have plagued this country and people for years. There needs to be a plan for housing. There needs to be a plan for supports for the SME sector. That sector looks at the decision reached in this case and measures the amount of tax that was not paid against the amount of tax that they paid. If we are to have tax justice, as it is described, we need to have these debates to reach a point where we know exactly what the corporation tax rate is, how it is applied and how much the various companies benefit from whatever reliefs they are using to reach their point of return to the Revenue Commissioners. It is a debate that is as much about the management of the State as it is about the individual issues that have emerged because of the Apple decision.

We cannot help but reflect on how the State spends its money. The recent bicycle shed issue is just one example. It raises great concern with me that that same type of administration within the country will now be looking at how to spend this vast amount of money. Over the last ten years or more, no effort has been made to reform the Dáil in such a way that it would hold the Government truly accountable and where it would hold the administration of the country, in the context of the civil and public service, truly accountable. As a result of that, the systems and processes within the State to monitor all of this and even to go through budgets are archaic; they are from the dark ages. Everything is controlled in just one direction. That is why we get situations like Apple and like the Dermot Tobin case at the other end of that spectrum. As long as we do our business in this way, we will forever be in trouble with one spend of a Department or another.

I have always advocated for the remit of the Comptroller and Auditor General to be extended to include local government and to include the ability to examine any allocation by the State to a body to spend that arises from taxpayers’ money. If that ability to investigate was there and it was made clear in application forms and everything else, there would be a different approach to how people would spend money. If individuals were held accountable and named there would be a different attitude towards how taxpayers’ money was spent. However, we do not do transparency very well. We do not do accountability very well. I would suggest to this Government or the next Government however that may be made up, that the one single way to deal with it is to extend the powers of the Comptroller and Auditor General.

Only today, the finance committee dealt with the legislation to wind up IBRC and NAMA. There is no role for the Comptroller and Auditor General to examine fees and other aspects of the working out of these two organisations in the interest of the taxpayer. There is no method for the Comptroller and Auditor General to be involved. That, in itself, tells us what the State does in terms of legislation: the taxpayer is always shortchanged in all of this. Just as when the small business is compared with Apple, it is the small business that is shortchanged. Individuals and their taxes are shortchanged. Until that is addressed, we will not have tax justice and we will not have a respect for the State to be shown by everyone - the citizens, those involved in politics and those in the Departments. The reform of the Comptroller and Auditor General’s position, enhancing those powers and enhancing the powers of the public accounts committee, would be a major step in the right direction.

To make this House more meaningful in the context of this debate, this opening debate should be seen as the first step of many to air our dirty linen or to air our suggestions or whatever it might be, but to give democratic voice to what is going on in Ireland in our tax system and elsewhere. The electorate now expect it of us but since the financial crash, no genuine attempt has been made to reform the various institutions to make them more transparent and more accountable. Just a few small steps need to be taken if we are to honour our desire to reform truly the mechanisms of the State and achieve value for taxpayers’ money.

See this speech in context