asked the Minister for Finance his views on the recommendation of the Commission on Taxation that once the present special relief for manufacturing profits expires in 2000 AD, such profits should be charged to tax on the same rate that applies to other corporate income.
Ceisteanna—Questions. Oral Answers. - Commission on Taxation Recommendation.
2.
This recommendation of the Commission on Taxation was made in a particular context which envisaged a single low rate of taxation in the range 25 per cent to 30 per cent to apply to all income including corporate income.
I would not be prepared to speculate at this stage about the tax regime to apply after the year 2000. I would underline, however, the vital importance of the 10 per cent rate as an incentive to investment in this country.
Will the Minister agree that some concern has been expressed. for example by representatives of the Confederation of Irish Industry on budget night, about the need to know, for long-term corporate planning and investments which will yield over a period, what the tax regime obtaining 12 years from now will be? Will the Minister give an indication of when he expects to be making a decision on this subject?
The Deputy is correct in saying that some people are concerned but I do not think it is a major problem at this stage. We are talking about a taxation regime 12 years from now but I am sure the Deputy will appreciate that it would be difficult for the Minister for Finance to give details of what the taxation regime might be for 1989. It is premature at this stage to indicate, or speculate on what regime should or may apply after the year 2000.
Will the Minister concede that in the past one of the major sales tools in the hands of Irish Ministers seeking investment here has been that the corporate tax regime, as far as the rate of profit tax is concerned, was guaranteed up to the end of the century not to be above 10 per cent? Will the Minister agree that long-term assurances diminish in value as we come closer to the date? Will the Minister agree that it is desirable that the present regime should be replaced as soon as is convenient with a longer-term perspective that could be offered to companies as a means of inducing them to come here, given that it has been our experience that the existence of such an assurance up to the end of the century has been valuable? Will the Minister agree that we should roll that forward in some form at an early date?
I agree that the incentive has been a great advantage to those who are trying to attract industry here. I have no doubt that we will be seeking to continue such a regime but the Deputy, and the House, will be aware that as members of the European Community we will have to have such a proposal approved by the Community. It is a little early to speculate what may or may not happen between now and the year 2000.
Is the Minister doing anything about this?
It does not arise at present.