Dáil Éireann Debate, Tuesday - 26 July 2022
428. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated full-year revenue that would be generated by establishing a new levy of 5% on the profits of all airlines and aircraft leasing companies; and if he will make a statement on the matter. [41578/22]
View answerI am advised by Revenue that the gross additional yield from imposing a 5% levy on the taxable profits of all airlines and aircraft leasing companies is tentatively estimated to be in the region of €36 million for a full year. These estimates are based on the 2020 tax returns, the latest year for which fully analysed data is available.
These estimates do not take account of any potential change in behaviour by the entities concerned in response to the rate change.
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 investors, suppliers and, ultimately, 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 additional taxes or levies on companies at this time.
