Leo Varadkar (Dublin West, Fine Gael)
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Question 217: To ask the Minister for Finance the amount that would be raised by increasing corporation profit tax to 15%; and if he will make a statement on the matter. [35853/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The full year gain to the Exchequer from increasing the current standard rate of corporation tax from 12.5 per cent to 15 per cent is tentatively estimated to be about €590 million. The gain includes the effect of increasing the standard rate for manufacturing companies from 12.5% to 15%, with the termination of the 10% rate of corporation tax for these companies taking effect from 31st December 2010. While this estimate is technically correct it does not take into account any possible behavioural change on the part of taxpayers as a consequence of such an increase which is likely to be very significant and could cancel out any potential increase in the overall yield.

It should also be noted that Ireland's low Corporation Tax (CT) rate plays an important role in attracting foreign direct investment to Ireland thereby increasing employment here. We also must consider Ireland's place in the new enlarged EU where CT rates are low in some new member states. Ireland must continue to remain competitive in this environment. For these reasons it is essential that we maintain our present low CT rate.

Leo Varadkar (Dublin West, Fine Gael)
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Question 218: To ask the Minister for Finance the amount that would be raised by imposing a profit tax of 12.5% on financial institutions on top of the existing corporation profit tax; and if he will make a statement on the matter. [35854/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that the basis for any estimate of the corporation tax yield from the action suggested by the Deputy would be the corporation tax returns filed for the year 2008 (the latest year for which such information is available). Assuming that the proposed additional tax rate would apply to the same taxable income of financial institutions to which current corporation tax rates apply, it is tentatively estimated that the full year yield to the Exchequer from imposing an additional tax rate of 12.5% could be of the order of €1.6 billion.

While this estimate is technically correct, it does not take into account any behavioural change on the part of taxpayers as a consequence of such a measure which would be a significant factor given the scale of the increase suggested in the question. The mobile nature of financial services is such that it is very likely that much, if not all, of the international activity, in particular, being undertaken here would take flight. It should also be noted that corporate profitability in the financial sector is likely to have fallen since 2008 to the extent that the estimated yield from this measure in current terms would be lower than the figure given by reference to 2008 profits. I have already highlighted, in separate replies to questions from the Deputy and others relating to the 12.5% rate, the huge importance to Ireland's international competitive position of maintaining this rate.

Leo Varadkar (Dublin West, Fine Gael)
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Question 219: To ask the Minister for Finance the way the €50 million from the carbon tax promised by him in the budget to assist persons at risk of fuel poverty has been allocated and used; if he will provide a detailed breakdown of same; and if he will make a statement on the matter. [35855/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I stated in my Budget speech that the revenue from the carbon tax will, amongst other things, be used to boost energy efficiency, to support rural transport and to alleviate fuel poverty. I would point out that the lowest income households tend to be more dependent on solid fuels such as coal and peat. In that regard the carbon tax has yet to be applied to those products. There is ongoing progress by the relevant agencies under the remit of the Department of Energy, Communications and Natural Resources to target low income households for energy efficient investment.