Seanad debates

Tuesday, 3 December 2019

Finance Bill 2019: Committee Stage

 

2:30 pm

Photo of Alice-Mary HigginsAlice-Mary Higgins (Independent) | Oireachtas source

I oppose the section and I have also tabled recommendations to the section. Section 11 concerns the KEEP scheme. It is the one the Minister of State was preparing to discuss earlier. Section 11 is an extension of the KEEP scheme. My core issue is not with the measures concerning the extension, which relate to part-time, flexible working arrangements, although there is also a question mark over the movement between qualifying companies within the group. My concern is that the KEEP scheme effectively allows for employees to take a large portion of the emoluments they receive for their work in a company in the form of shares and thereby reduce the taxation they pay on the income derived. It is a really key concern as it benefits only those in private companies because it relates to companies that have shareholdings and where shares are an issue. It does not benefit those working in the public service. Persons may choose to have up to 50% of their wages paid in the form of stocks or share options.For example, they could get up to €100,000 a year in stock and share options and up to 50% of the total emoluments could be treated and take the form of shares. This is a real concern because it is another measure that means people will potentially be paying less tax to the Exchequer relative to their income because they are paying the rates for shares and stocks which, while they might be caught elsewhere, are not caught at the same rate, rather than as income. I am concerned that we are creating a perverse incentive whereby we are encouraging people to move from a model of payment as income to a model whereby they will be getting portions of their income as shares.

I know the Minister of State may welcome co-operative schemes, employee dividend schemes and so forth. If that was the case there would certainly be some merit in this but it is quite wide and can be used by a wide range of companies. There is concern over the specific new measure inserted in section 11 - perhaps the Minister of State can clarify it - regarding people moving between companies within a group. A group may have companies, one of which is profitable and one of which it chooses to make unprofitable for various reasons and tax reliefs. We have had considerable concern over that kind of issue.

Could somebody be working for one company and be taking shares of another company owned by the same network of companies as part of his or her emoluments under the scheme? That seems to be part of the new scheme allowing movement between qualifying companies within the group. I ask the Minister of State to clarify that. Could a person be working for one company while receiving shares of another company within that group? I can see numerous concerns that might arise from that measure aside from my general concern about the KEEP scheme.

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