Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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67. To ask the Minister for Finance the work he is undertaking to review the system of corporate tax relief and expenditure in preparation for budget 2019; and if he will make a statement on the matter. [31031/18]

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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As I have made clear repeatedly since I was elected to this House in 2011, I think the system of corporate tax reliefs and allowances are the dirty secret of the Irish tax code in that they bestow enormous tax breaks and big tax loopholes to the benefit of a small number of corporations. Whether it is research and development tax credits, knowledge development boxes, losses forward or intangible assets, and I have raised issues about the section 481 film relief, I can go through the list of loopholes that benefit the big multinationals. Will the Minister undertake a serious, forensic and open review of these in the context of the upcoming budget, when we could seriously do with some extra money for housing, health, infrastructure and a whole range of other pressing social needs?

Paschal Donohoe (Dublin Central, Fine Gael)
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We have already done that. As the Deputy will be aware, a review of the Irish corporate tax system was undertaken by Mr. Seamus Coffey, an independent expert, and was published in 2017. It was open, the public were able to make submissions to it, as were stakeholders, and the report was made public and published on the Department of Finance website. The terms of reference for that review included some of the issues touched on by the Deputy, such as tax transparency, avoiding preferential treatment, further implementing our international commitments, delivering tax certainty, maintaining competitiveness and maintaining the 12.5% corporation tax rate.

As part of an ongoing process of corporation tax reform, the review was followed by a public consultation on the review's recommendations and on the implementation of the anti-tax avoidance directive, ATAD. Implementation of the measures agreed at EU level under ATAD include the introduction of controlled foreign corporation rules, anti-hybrid rules, a new interest limitation ratio, the revision of exit tax provisions and a review of the general anti-abuse rule. This is a very significant undertaking which will substantially transform the corporate tax system over the coming years.

In regard to tax reliefs, we have a small number of specifically targeted tax reliefs. The focus of these reliefs is on the creation of additional employment, as is consistent with current Government policy, and on innovation, with a view to generating high value-added economic activity and further jobs in our country.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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For the Minister to describe it as a small number of targeted allowances is incredible. The latest available figures for corporate tax, which are always a few years behind, which is itself a problem, are for 2015. They show €144 billion in gross profits and tax paid of €6.2 billion, which is less than 5%, not 12.5%. Let us look at one example, the research and development tax credit. In 2015 the research and development tax credit was €708 million. Does the Minister know who actually pays for that? He has to look no further than the report about Irish universities tumbling further down the international rankings and professors from those universities saying the reason Irish universities are falling down the rankings is because the staff to student ratio is going through the roof. Money that should be going into Irish universities for teachers, lecturers and students is going to a small number of multinational corporations which are avoiding tax. If we have money for research and development, instead of it going to super-wealthy, profitable and tax-avoiding multinationals, should it not go into our universities?

Paschal Donohoe (Dublin Central, Fine Gael)
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We are already investing in our universities. Project Ireland 2040, the plan published by the Government earlier in the year, includes the plan for increasing capital investment in our universities and institutes of technology for the next decade. Has the Deputy seen what is happening at the DIT campus at Grangegorman? That is public capital investment. Has he seen the decision recently by Trinity College in regard to providing an additional 1,000 spaces for students to study engineering and science? That is the result of investment that has been made both philanthropically and by the Higher Education Authority through the Department of Education and Skills and the Government. Has he seen the investment and loans from the European Investment Bank to all of the universities across our country in order to lead to further expansion and development?

That is investment. The Deputy cannot make the case that we are not increasing investment in higher and further education. For example, in the last budget we increased the employer's rate of PRSI by 0.1% to set up a national training fund that, in turn, is invested into higher and further education. This is the kind of investment he is calling for.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The facts speak for themselves. Irish universities have tumbled further down the international rankings. Why? As the professors of those universities explain, our teacher to student ratio in the universities is now rising to 1:20 as against 1:10 in China, for example.

A few buildings might be built but teachers must be employed and registration fees that are blocking people from going into third level must be removed. That requires more money going in but instead, €708 million in tax loopholes is given to a small number of multinational corporations. The incredible €20 billion in losses brought forward whereby banks pay no tax and the intangible assets where the big multinational corporations essentially siphon off profits into offshore tax havens facilitated by this country can be added to that list. It is absolutely shocking. Why does the Government not have a minimum effective corporate tax rate where these corporations pay the 12.5% that would release billions to put into our universities, housing, water infrastructure and so many other things that need real investment?

Michael McGrath (Cork South Central, Fianna Fail)
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On the related issue of corporate tax receipts, it is the stand-out performer again in our Exchequer receipts and is up 15% year on year, which is 9% above the target. There is a lot of volatility in corporate tax receipts. Thankfully, it is all on the favourable side at the moment. It is good that we are collecting this money but is the Minister satisfied that the Revenue and the Department have a good handle on their capacity to predict the level of receipts we will get?

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes I am. We understand the reasons why there has been a further change in corporate tax receipts for this year and we are increasingly clear on what our likely end point will be for 2018. We need to take care, however, in assuming that will continue into 2019, 2020 and beyond. We have seen very significant shifts in corporate tax receipts over the past number of years and I will not be basing budgetary plans for 2019 or beyond on the assumption that we will see further large increases like we have seen in the past. We need to be careful about planning for that in the future.

On Deputy Boyd Barrett's question, the reason why I will not bring in a minimum effective tax rate is because in my judgment, that would be harmful for jobs and investment in Ireland. If I was to bring that in and we were to lose any jobs as a result of it, there would be plenty of Deputies in this House calling for me to go and Deputy Boyd Barrett would probably come in here and point to this as an example of the collapse in global capitalism that he predicted was going to happen. As I said to Deputy Paul Murphy earlier on, there are 88,000 people employed in Dublin alone as a result of international investment. I am committed to addressing issues of international concern but it is not just a prerogative of large countries to be competitive. It is open to us to pursue our policies in that area too.