asked the Minister for Industry and Commerce the instructions, if any, that he has given to the Industrial Development Authority as to how they should sell Ireland as an attractive base for investment in the new situation now existing following publication of the Government's White Paper on Capital Taxation.
Ceisteanna—Questions. Oral Answers. - Investment in Ireland.
177.
I do not believe that any instructions of the kind referred to in the question are called for.
Is the Minister aware that under the proposed system of taxation the type of projects in question brought here by the IDA could become liable to capital gains tax and in so far as individuals hold equity in the limited companies concerned—if they are limited companies—they become liable to the proposed wealth tax? Further, is the Minister aware that on this basis in a number of cases such firms could find themselves paying considerably more than they would pay if they were liable for income tax on the profits derived from exports? In these circumstances how does the Minister justify the statement that no such instruction or no instructions of any kind are called for?
I understand that the IDA were consulted informally about the possible effects on industrial development of these taxation proposals and there seems to be no reason to suppose that the Government's White Paper would have the effect which the Deputy fears—I presume "fears" is the right word. As the House knows, of the seven continental EEC members all operate a death duty, all operate a capital gains tax, six operate a gifts tax and four operate an annual wealth tax. Of 12 non-EEC countries all operate a death duty and a gift tax, ten operate a capital gains tax and six an annual wealth tax. It is against this background that it was not felt that instructions of the kind referred to in the question were called for.
I assume that because the Minister answering is not the Minister for Industry and Commerce he has just said what he did say. He will appreciate that we, through the IDA, are selling Ireland and that our main weapon is the export tax relief and therefore what is happening in other EEC countries without this benefit is totally irrelevant. But arising out of the reply he made earlier could I be clear on this: is the Minister saying that the views of the IDA were sought in relation to the proposed taxation outlined in the White Paper on capital taxation and that the IDA expressed the view that these proposals would not interfere in any way with their ability to carry out their statutory functions of attracting industrial development to this country? Is that what the Minister said?
If the Deputy wants further information on that subject I think he had better put down a separate question. This is a separate question he has asked. In his original question he asked whether the Minister had given the IDA certain instructions and I informed him that no such instructions were felt to be called for. If the Deputy wishes to put down a separate question, he may do so.
May I point out that the Minister himself said—he volunteered the information—that the IDA were consulted and he implied, although I do not think he said, that the view expressed by the IDA was that these proposals would not interfere with their activities. I am asking him if he is saying that is what the IDA advised because that is what I thought he implied. Is he saying that is so or that it is not so?
I suggest that is a separate question which the Deputy can put down.
Then why did the Minister say what he did say?
Question No. 178.