Thursday, 22 March 2012
Finance Bill 2012 (Certified Money Bill): Committee and Remaining Stages
Kathryn Reilly (Sinn Fein)
I move recommendation No. 12:
In page 26, between lines 30 and 31, to insert the following:
“(4) The Minister shall, within one year of the passing of this Act, prepare and lay before Dáil Éireann a report detailing the volume of relief sought and secured under this section and the increased volume of trade in the relevant states secured during the period of time for which the relief was claimed.”.
This relief is one of a number of tax reliefs introduced with the aim of increasing job creation and recommendations Nos. 12 and 13 seek to ensure this is their actual effect. As was mentioned, previous Governments were fond of introducing tax reliefs in order to enrich small groups of people, claiming they would be good for the economy as a whole. As a result the Exchequer ended up losing billions in revenue foregone every year, with very little economic or social gain.
We do not suggest this is the Minister’s intention in this section but it is only right that those seeking to avail of this relief should do more to demonstrate they deserve to receive the substantial windfalls they will secure. Failure to ensure this will lead to more people concluding that this Government is simply following in the footsteps of its predecessors by placing the majority of the tax burden on low-income earners while reducing tax for those on higher incomes.
Recommendation No. 12 provides that the Minister shall, within one year of the passing of this legislation prepare and lay before the Dáil a report detailing the volume of relief sought and secured under this section and the increased volume of trade in the relevant states secured during the period of time for which the relief was claimed. It provides for an assessment to be held within one year of the passing of this legislation in order to discover whether this provision is working. It may not work and individuals may benefit from this relief for purposes other than those for which it is intended.
Similarly, recommendation No. 13 seeks to tie eligibility for this relief with an increase in trade in the country in which the employee is based. I presume the intention behind this relief is to encourage people to engage in trade, for example, with the BRIC countries because of their potential. I reiterate, all reliefs should be focused and directed. We need to see there is a substantial link to an increase in trade with the country in which the employee is based and the need for the relief. Arguments have been made about the measurement of exports increasing but that does not tell us the full story, or whether individuals or companies availing of the relief results in increased exports. What is required is an assessment by a company or individual to show there has been an increase in trade. Recommendation No. 13 states that “the authorised officer shall request evidence that the period of time for which the relief is claimed resulted in a clear and demonstrable increase in the volume of trade in the relevant state” and that the Minister shall set out, by ministerial order, the basis for these requests. This does not preclude the relief being granted but attempts to focus and channel that relief to ensure that the individuals trying to grow the export market for the State benefit from it. What are the implications for the State’s tax take and what would be the net cost of this measure? How many individuals will avail of this relief and are there safeguards to prevent its abuse?