Tuesday, 18 June 2019

Questions (152)

Pearse Doherty

Question:

152. Deputy Pearse Doherty asked the Minister for Finance if he will consider introducing a super tax on insurance companies in the form of a surcharge on corporation tax or by other means; and if he will make a statement on the matter. [25514/19]

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Written answers (Question to Finance)

As a small open economy, connected to Europe, the US and the wider world, Ireland is committed to a competitive, transparent and stable corporation tax system. Our corporation tax system follows the principle of applying low rates to a broad base, which is widely recognised as being the most economically efficient model. Maintaining a corporation tax system that is sustainable and which meets the highest international standards allows us to offer certainty, which facilitates business planning, investment and job creation in Ireland. The proposed introduction of a corporation tax surcharge for insurance companies would not be in keeping with our commitment to a sustainable and stable corporation tax system. I would also note that State Aid implications would need to be considered in proposing any change which would provide a varied rate of tax to any targeted cohort of taxpayers.

Furthermore, I am of the view that the introduction of any super tax surcharge for insurance companies would ultimately have a negative impact on consumers and businesses. There would be a very real risk that such a move would simply drive insurance prices up further, as this tax would almost certainly be passed on to the policyholder. Such a proposal might also send out the wrong signal to insurers considering establishing in Ireland and therefore decrease future competition in the market, reducing choice for consumers.

For these reasons I do not believe the introduction of a corporation tax surcharge for insurance companies, as suggested by the Deputy, would be appropriate.