Dáil Éireann Debate, Thursday - 1 February 2024
98. Deputy Richard Boyd Barrett asked the Minister for Finance if he will consider introducing a digital tax on digital and social media companies, as an alternative method of funding public service broadband to replace the regressive and widely discredited TV licence model; and if he will make a statement on the matter. [4569/24]
View answerAs has been stated on numerous occasions, this Government is committed to the reform of the TV licence. A long-term funding is model is needed, to deliver effective reform and ensure that a secure, sustainable funding model is put in place for our public service media.
The Future of Media Commission was established to, amongst other things, consider sustainable public funding model and noted three main funding models, a TV Licence, a universal charge, or direct Exchequer funding. While the Commission recommended a direct Exchequer funding model, Government established a Technical Working Group in order to examine other potential options for the reform and enhancement of the existing system.
I understand that the Working Group submitted their report to my colleague, the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media last year, and while initial discussions on the matter had commenced, the events over the summer regarding RTÉ meant that a final decision had to be paused. As Minister Martin has stated, while discussions on the matter are continuing, a final decision on this matter will not be taken until the independent reviews into RTÉ, carried out by the Expert Advisory Committees that Government appointed, are complete and have received consideration. I am advised that these reports are expected at the end of February.
It would not be appropriate for me to pre-empt consideration of the matter by Government.
Regarding a tax on digital and social media companies, the Deputy will be aware that the European Commission previously made a legislative proposal for a digital services tax based on a €750 million global revenue threshold and an EU-wide €50 million revenue from in-scope services threshold. This proposal, together with other digital taxes proposed or implemented around the globe, were received negatively. Subsequently, negotiations by the OECD and the G20 on reforms to the international system of taxation led to the OECD Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy in October 2021.
It must be noted that Pillar One of the OECD Agreement provides for the standstill and removal of unilateral measures such as digital services taxes. I firmly believe that Pillar One of the agreement will be successfully implemented, as was the case with Pillar Two, in a manner faithful to the agreement.
It is important that any proposal for additional taxation avoids raising trade tensions and does not undermine the ongoing development and implementation of the OECD agreement. Implementation of the agreement will bring much needed stability to the international tax framework after the turbulence and uncertainty of the last couple of years. Throughout this process, I have remained convinced that a global approach under Pillar One of the OECD agreement is preferable to unilateral measures like a Digital Services Tax.
