Dáil Éireann Debate, Tuesday - 26 July 2022
418. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated full-year revenue that would be generated by introducing a 4% levy on profits of pharmaceutical companies and private health companies; and if he will make a statement on the matter. [41555/22]
View answerI am advised by Revenue that, on the basis of information included in the Corporation Tax returns filed for the tax year 2020, the potential yield from imposing a 4% levy on the profits of private human health and pharmaceutical companies, including nursing homes and home care agencies, is tentatively estimated to be in the region of €900 million, with over 99% of this from pharmaceutical companies.
It has been assumed that the levy would apply to the taxable profits of pharmaceutical companies, nursing homes and home care agencies, but would not apply to medical practices or private hospitals. The potential yield assumes no behavioural change on the part of these companies.
As the Deputy will be aware, the trading profits of companies in Ireland are generally taxed at the standard corporation tax rate of 12.5%. Some of the main features of the current regime are its simplicity and that it applies to a broad base.
Imposing additional taxes on certain sectors would involve increased complexity and could change the attractiveness of Ireland's corporate tax regime. While it is possible that imposing such taxes could lead to theoretical gains, there is a risk of such taxes leading to lower levels of economic activity and to companies passing the additional tax burden onto their suppliers or consumers.
It should be noted that Ireland’s corporation tax regime has been undergoing a process of significant reform in recent years. The Deputy will be aware that, on 8 October 2021, Ireland joined over 130 other member jurisdictions of the OECD/G20 Inclusive Framework in reaching an historic two-pillar agreement to address the BEPS-related tax challenges that have arisen from globalisation and digitalisation.
In consideration of the need for certainty regarding our corporation tax regime, and acknowledgment of the significant international corporate tax developments underway, I do not believe it is appropriate to introduce any additional taxes or levies on companies at this time.
