Dáil Éireann díospóireacht -
Wednesday, 7 Oct 2015

Vol. 892 No. 1

Corporate Tax Policy: Motion (Resumed) [Private Members]

The following motion was moved by Deputy Maureen O'Sullivan on Tuesday, 6 October 2015:

That Dáil Éireann:

notes:

— the growing international consensus that aggressive tax avoidance and evasion by multinational corporations is now a major contributory factor in the staggering increase in global economic inequality and a spectacular growth in the gap between rich and poor which, according to Oxfam, with current trends, the combined wealth of the richest 1% will overtake that of the other 99% of people in the world;

— that the global trend of increasing economic inequality and growing poverty is echoed in Ireland, where for example, the Think-tank for Action on Social Change, TASC, recently estimated that the wealthiest 10% of the population now own 42.3% of all wealth, whereas the bottom 50% of the population own only 12.2 per cent, and where simultaneously there has been a dramatic increase in deprivation, poverty and homelessness in recent years, such that 750,000 people, including 232,000 children, now live in poverty;

— concern that Ireland’s low corporate tax rate and company regulatory regime do not support adequate accountability from multinational companies operating out of Ireland;

— that the exchange of information between tax jurisdictions is not automatic;

— concern that the recent European Commission investigation into Apple in Ireland revealed a lack of transparency and accountability from Ireland’s Revenue Commissioners to the people of Ireland at that time; and

— that Ireland is part of a network for international corporate tax avoidance and evasion as demonstrated in the so-called ‘LuxLeaks’ scandal and the widely criticised ‘double-Irish’ phenomenon; and

calls on the Government to:

— require full financial transparency from multinational companies in tax matters, making their annual ‘country by country’ financial reports publicly available;

— support automatic information exchange on tax matters between all tax jurisdictions including a non-reciprocal transition period and long-term support for developing countries to comply with requirements;

— establish a public register of the beneficial owners of companies and trusts operating in Ireland;

— close tax loopholes whereby multinational companies may engage in transfer pricing abuse in Ireland and empower the Revenue Commissioner to act to reverse this behaviour;

— move urgently to change Ireland’s corporate tax regime with the aim of ensuring that the corporate and financial sector significantly increase their tax contribution to the Exchequer and to society;

— ensure that, following the decision to close-off the so-called ‘double-Irish’ tax avoidance mechanism, the proposed ‘knowledge box’ does not become another mechanism for large-scale tax avoidance or evasion by multinational corporations; and

— eliminate any aspects of Ireland’s tax regime that facilitate ‘spill-over’ effects in developing countries which deprive those countries of tax revenue that should legitimately accrue to them.

Debate resumed on amendment No.1:

To delete all words after “Dáil Éireann” and substitute the following:

"welcomes the publication of the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) 2015 Final Reports which outline an internationally agreed approach to combatting aggressive tax planning and harmful tax practices;

notes that:

— from the beginning, the key aim of the BEPS project has been to align the right to tax with real economic substance and activity and, as such, the BEPS project is one which aligns with Ireland’s own tax strategy; and

— the BEPS reports give countries the tools they need to ensure that profits are taxed where economic activities generating the profits are performed and where value is created, while giving business greater certainty by reducing disputes over the application of international tax rules;

believes the OECD BEPS recommendations provide the best solution to the global problems of base erosion and profit shifting;

further notes:

— the intention of the Government to introduce country-by-country reporting in line with the approach agreed in the OECD;

— the intention of the Government to introduce a Knowledge Development Box, which will be the first and only such box in the world that complies with the OECD’s new standards; and

— that changes to the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations as a result of the BEPS project will ensure the better alignment of the taxation of profits with economic activity;

welcomes the participation of developing countries and regional tax organisations in the BEPS project work and their influence on the outputs of the BEPS reports, and further welcomes the OECD’s commitment to continue this engagement and to develop practical tool-kits to assist developing countries in targeting BEPS activities;

notes the Government’s intention to publish a spillover analysis of the impact of Ireland’s tax system, including the tax treaty network, on the economies of developing countries with Budget 2016;

recalls that Ireland has introduced changes to its corporate tax residence rules to ensure that they keep pace with international best practice;

notes that the 12.5 per cent corporation tax rate is a key element of Ireland’s corporate tax strategy together with our regime and our reputation and that the extensive research published with Budget 2015 shows how this has played a crucial role in attracting and retaining foreign direct investment in Ireland; and

welcomes the fact that:

— Ireland has been a world leader in the area of tax transparency;

— Ireland was one of the first countries in the world to sign a Foreign Account Tax Compliance Act (FATCA) agreement on automatic exchange of financial information with the United States of America;

— Ireland is a member of the Early Adopters Group, that have committed to early implementation of the new OECD standard on the automatic exchange of financial account information;

— Ireland was one of just 18 countries to receive the top rating as part of the Global Forum on Transparency and Exchange of Information for Tax Purposes peer review process of countries exchange of information legislation; and

— as an European Union (EU) member state, Ireland has also agreed to the EU Directives on automatic exchange on information within the EU and is committed to their transposition.

- (Minister of State at the Department of Finance)

Deputy Pearse Doherty

Cuirim fáilte roimh an díospóireacht atá againn anocht faoin gcáin chorparáideach. Bíonn an díospóireacht seo againn go rialta sa Teach seo anois, go háirithe ó thaobh an ráta de, ach tá an rún atá os comhair an Tí níos leithne ná seo agus sílim gur rún iontach maith é agus go ndéanann sé ciall.

I welcome the debate on this matter and thank the Technical Group for tabling the motion. Although I would not agree with every part of it, it is a good motion and, unlike the Government's delusional amendment, it actually deals with the real world and Ireland's place in it. My party believes it is time for an honest debate on corporation tax in this State. In the past, when I even mentioned the name of a particular company - Apple - I was literally shouted down by Fine Gael Deputies, including by the current Minister of State at the Department of Foreign Affairs and Trade, Deputy Dara Murphy. That is the level of maturity this Government has shown and has brought to the debate about our corporation tax regime. That is not good enough. Unfortunately, I see no signs of any progress in the amendment before us.

When I first suggested that we move to close the loophole that allowed some companies to be stateless, I was told it could not be done. I produced legislation but was informed it could not be enacted. Months later it was done. In January 2013, when I challenged the Minister for Finance, Deputy Noonan, on the double Irish - one of the many times that I challenged him on it - he told this House:

The problem with the so-called "double Irish" from Ireland's point of view is that it has that name. People think that something we do here gives rise to it. That is not the case. It arises from tax codes elsewhere and the way in which the USA regards certain arrangements. We do not operate any kind of tax haven.

That is what the Minister had to say in 2013 but a year later the double Irish was closed down. Clearly, it was not just about the way that the USA regards certain arrangements. We always had the ability to close down the double Irish but the Government did not want to do so. Unlike with the closing down of other tax loopholes, however, companies have been given five years to stop using the double Irish. Compare the treatment for major multinational companies, some with wealth in excess of the wealth of this State, with that of other taxpayers who have been told overnight that they have lost their benefits, supports or tax credits as a result of decisions of this Government on budget day.

This is a Government that had to be dragged, kicking and screaming and under international pressure, to change any of our systems. On my request, the Committee on Finance, Public Expenditure and Reform set up a sub­committee to examine the corporation tax issue and the very low rates that some multinational companies were paying to the State. It seems the Government members appointed to that sub-committee were given a mandate to shut down any discussion on the facts of Ireland's corporation tax regime. Despite the fact that companies which were tax resident in Ireland, particularly Apple, were willingly going before the United States Congress and saying that they had a sweetheart deal - created back in the 1980s - with the tax authorities here, members of the finance committee were unwilling to ask any of the multinational corporations to even come in and have a chat.

The Government says it is leading the way but that is a ridiculous statement. The Government has been dragged some of the way and is now claiming that it was a willing traveller on the road. My party supports the current rate of corporation tax but we think it should be a meaningful rate. We do not pretend to ourselves that every company pays it in full. Some do not and pretending that they do is simply foolish. This is about ensuring that profitable companies, some of them the most profitable in the world, pay the appropriate tax at 12.5%.

Reading the Government amendment, one would think that this country's reputation as a fair place to do business was not under a shadow. That shadow did not begin under this Government but it seems content to position the country under it for as long as possible. The world is changing, thank God, and is moving with small steps towards a more transparent tax environment. When Deputies in this House raise issues about the fairness of our system, however, they are shouted down.

Sinn Féin wants Ireland to compete for foreign direct investment and to benefit from it. The Minister for Finance spoken about the three Rs - rate, reputation and regime. Our rate is not in question and although it does not specifically call for it, I would not support the implication in the motion before us tonight that the rate must increase. Indeed, for many the rate is a red herring. Companies are not paying the full rate because of the different ways they can move or not declare profits and that is the problem. When it comes to the other two Rs, this State has a problem. Our regime has been probed in the USA, Australia and Britain and is now under serious scrutiny by the EU Commission. The shadow in this regard brings our reputation into question too. The Minister points to the changes made under this Government. There have been changes but all of them were made under serious pressure and done in a half-hearted manner. I have referenced a number of them already. Now the Government is introducing the mother of all tax avoidance measures, the knowledge box, thus backtracking on all of the changes that have happened. Knowledge boxes that were introduced in other jurisdictions are currently being examined, questioned and probed by other authorities.

I welcome the OECD report and action plan. I hope there are positive legislative changes in the Finance Bill which will make our system fairer and more transparent. I hope the needs of the developing world are kept central to the international work on this project. I have heard it thrown around in this State by people who know better that the BEPS project is about jealous countries attacking Ireland. That is absurd and I hope the Minister can put on record his view on that matter.

As we speak it is understood that the EU Commission is finalising its investigation into a potentially illegal tax arrangement between Apple and this State. That is an incredibly serious allegation. When this investigation was first announced the Minister, with very little credibility, played it down as routine and part of a wider EU investigation but that was never the case. This was always a serious, thorough and specific examination of Ireland's tax dealings. We have had spin and smoke and mirrors but when the final decision is taken, it will be in black and white. The investigation will determine whether this State acted to undermine its own tax base and to facilitate tax avoidance for a specific company. If it finds that Apple avoided taxes unfairly, normally that money would be returned to the State. That is what the law states. However, the Minister for Finance has repeatedly told me he does not want this money. He wants Apple to keep it. This must be a first. I have just come from a meeting of the Committee on Finance, Public Expenditure and Reform which examined the powers Revenue has to make people who owe tax pay what is due. Yet, when it comes to huge amounts potentially due to the Irish people as a result of this case, we are told that the Government does not want it. That is a crazy position. In the year to date, an additional €1.2 billion has been collected in corporation tax - an increase of 45%. This did not happen because our corporations have recorded 45% increases in profits but because the squeeze is starting to come on them and they are being forced to pay what they should have been paying for years. We now have a hugely indebted country that does not want debt relief and a State that does not want the tax potentially due to it from a company which made massive profits while operating here, a company that has more wealth than the State itself. Meanwhile, the Government cannot find €4 million for the residents at Longboat Quay or for housing for the homeless.

My party is all for a real, mature debate on our corporation tax regime and reputation. We are in favour of an all-Ireland corporation tax rate and want Ireland to be a responsible member of the international community with no cloud hanging over our tax reputation.

We are in favour of foreign direct investment and domestic indigenous enterprise and we support the right of the sovereign state to set its tax rate. Nobody understands the importance of economic sovereignty better than my party.

Sinn Féin is happy to support the motion, notwithstanding the reservations I have outlined. To the Government, I say it is time to grow up, face this issue head on and forget about schemes based on a nod and a wink. It is time to start building a real industrial policy that is not based on unsustainable loopholes.

Deputy Liam Twomey

I am surprised by some of the comments made by Deputy Pearse Doherty. Ireland may be an island but it is part of the global economy. Sinn Féin in Northern Ireland is trying to compete with the South in attracting foreign direct investment. While certain members of the Opposition are ignorant of the facts, that is not the case for Deputy Doherty, because he is well aware that Ireland has fully participated in the OECD's BEPS project for some years. He also knows the Government is committed to addressing these issues but that Ireland is not in a position to jump alone. Deputy Doherty may smile at that comment but he knows it to be true.

Some aspects of the motion will bring tears of joy to the eyes of officials in Berlin, London and Paris who would love Ireland to be shut down as a location for foreign direct investment, FDI. A unilateral decision to pursue a certain policy that salves the conscience of Deputy Doherty and other Opposition Deputies would end the contribution FDI companies make to the economy. Perhaps his party colleague, Deputy Jonathan O'Brien, would be happy to have the 4,000 workers employed by Apple in Cork lose their jobs in order that he can have a clear conscience when discussing these issues. Perhaps other members of the Opposition would like Intel to close down and move elsewhere, having invested €25 billion in Ireland in the past 20 years. If that is their policy, it is a crazy one.

BEPS will work because it seeks to have all countries move together to eliminate aggressive taxation avoidance. I give Deputy Pearse Doherty credit for no longer confusing the corporation tax rate of 12.5% with the Government's stated policy of eliminating aggressive tax avoidance schemes. That is a step in the right direction from a Deputy who is adept at engaging in spin and taking a selective approach in his contributions. He knows damn well that aggressive tax avoidance cannot be addressed comprehensively unless all countries move together. It was for this reason that the OECD was mandated to examine the issue, and it has worked on BEPS for the past four years. The 15 steps the organisation calls on all countries to take were agreed only last week. Ireland has been actively involved in making the BEPS process work.

The Government strongly believes that foreign direct investment has a major role to play in the economy. Not all of the 100,000 jobs that depend on FDI are senior executive positions. Many are held by people providing cleaning, building, transportation, electrical and other services to foreign companies located here. These companies are vital to the economy and very important for growth. It is disingenuous of Deputies to diss foreign direct investment as something we can forego or do not want and blacken the names of specific companies.

Deputy Doherty referred to a European Commission investigation into a certain company operating here. As he is aware, Commission investigations into exactly the same types of issue are under way in many other member states. The issues involved are complex. I can barely understand the concept of transfer pricing, for example, but perhaps Deputy Doherty is more of an expert on it than I am. In light of my discussions on BEPS with the OECD in recent years, I accept that transfer pricing can give rise to certain issues. Perhaps I, too, should take a simplistic approach and try to boil this issue down to "us and them" or other countries getting away with things we are unable to do. That is silly talk, however, and I expect more from Deputy Doherty, albeit not from his Opposition colleagues in the Technical Group whose sole argument does not make any sense.

Does Deputy Boyd Barrett want Google, Facebook and companies in the International Financial Services Centre to close down with the loss of many jobs? While Google may not be located in his constituency, some of his constituents either work in multinational companies or provide services to them. Does he want them all to leave the country to salve his conscience?

Deputy Richard Boyd Barrett

They can afford to pay a little more tax.

Acting Chairman (Deputy Catherine Byrne)

Is Deputy Twomey finished?

Deputy Liam Twomey

Having made my point, I will leave it at that.

Deputy Helen McEntee

I welcome the opportunity to participate in this debate. When I decided to seek election to Dáil Eireann in 2013, the country was in a very difficult position, much different from the position it is in now. However, I had confidence in what the Taoiseach, his Ministers and the Government were trying to do. It has been exactly 30 months since the people of County Meath elected me.

At the behest of the Opposition, the Dáil does not discuss as often as it should the economy or issues relating to employment for young people or, for that matter, persons of all ages. The two main Opposition parties do not have any credibility on the economy and have, therefore, remained silent on the matter for the most part. The Fianna Fáil Party's economic gambling has caused chaos in people's lives for years. Many people, including friends of mine, have emigrated to the United Kingdom, Australia, the United States and other countries. Sinn Féin's approach has played out in Greece with disastrous consequences for ordinary people. On the other hand, the Government's response to the crisis has worked. We have partnered constructively with many other European Union member states and we are now providing a stable business, employment and investment environment.

I compliment the Technical Group on tabling the motion because it is important to discuss national economic policy in the national Parliament. While I do not agree with the left-wing view of the world or share the Technical Group's hatred of multinational employers, I acknowledge that its members have sufficient confidence in their economic policies to table and debate an economic motion in the Dáil. In contrast, the other two main Opposition Parties do not have any confidence in their economic policies.

The motion is very hostile to multinational investment. It accuses the larger foreign direct investment companies and employers of taking advantage of ordinary people in Ireland and across the world and Fine Gael and the Labour Party of encouraging such predator-like behaviour. We must live in the real world. The people I represent in County Meath and those who are seeking employment or wish to retain their jobs or secure better employment also live in the real world and know that countries compete with each other to secure multinational foreign direct investment. The OECD has stated that taxation is at the core of countries' sovereignty and each country is free to design its corporate tax system as is chooses, including by charging the rate it chooses. Until such time as the global model changes and countries work together, it is the duty of the Government of this small island to attract as much employment as possible.

Ireland has only recently emerged from a very difficult economic period and few people have not been affected by the economic downturn. Unemployment is one of the main contributors to inequality, poverty and social discord. When the Government came to power in 2011, more than 420,000 people were unemployed and tens of thousands of others were emigrating, with many more facing the prospect of emigration. This Government had to make tough decisions and these decisions are starting to deliver change.

We are moving in the right direction in terms of employment. One of the fastest ways to bring a country out of poverty is to create employment and, more important, to create an environment in which employment can grow. The reason many of my generation in County Meath did not have to emigrate in recent years was that we had companies such as Intel in Leixlip, Alltech in Dunboyne, which employs more than 200 people, and Kingspan in Kingscourt, which employs several hundred people. The responsible and realistic corporation taxation policy pursued by the Government has been a key factor in attracting new companies to County Meath in recent years. These include MDS Global Technologies and SWG, two new companies which will provide 50 jobs at the Kells Enterprise and Technology Centre, and Facebook, which will develop a data centre at Clonee providing 115 jobs. These employment opportunities for people in County Meath would not have been achieved if the Government's responsible investment strategy had been substituted with the policies being proposed by the Opposition.

I will close with a point related to rural Ireland and multinational business. Every multinational company in the world is now practising what is known as telecommuting or working from home. This suits companies because hiring remote workers opens the talent pool for companies that would otherwise be confined to hiring people living in the immediate vicinity. Telecommuting also limits absences and generates savings in areas such as office space and electricity and lunch bills.

It suits employees who can avoid traffic and fuel costs while child care costs are reduced. However, working from home requires video chats, conference calls, VPN networks and wireless internet so that workers can constantly stay connected. The Government's generous taxation policy for multinational foreign direct investment proves that it is serious about attracting investment, but we must give our own workers the tools to work within that economic model. We really need to start focusing on improving broadband in rural areas in respect of providing employment for thousands of people in Meath and elsewhere in Ireland.

Deputy Peter Fitzpatrick

I welcome the opportunity to take part in this evening's debate. Profit shifting is a global phenomenon and it will require a global approach to find a solution that is fair to everyone. The OECD this month published a range of detailed reports arising from its base erosion and profit shifting project. The overall aim of the project was to prevent double non-taxation which came about as a result of inequalities in international tax rules and also to better align the right to tax with real economic substance and activity on a country-by-country basis. As a Government, we have been supportive of the BEPS project which, it must be noted, aligns with our own tax strategy and we will now play an active part to ensure that the recommendations are implemented.

Ireland relies heavily on foreign direct investment. Indeed, in my constituency of Louth, we have secured one in ten of all new jobs brought into Ireland by foreign direct investment. In Dundalk, 450 new jobs have been created by eBay, 400 new jobs in Paypal, 200 new jobs in National Pen, which is also looking to create an additional 60 permanent positions shortly, and 100 in Sales Sense. In mid-Louth, the rate of unemployment has fallen by over 30% while in Drogheda it has fallen by over 24% since March 2011. It has been proven time and time again that the only way out of poverty is full-time employment and making work pay. We must also deal in real facts. Ireland is below the EU average for people who are at risk of poverty. Ireland has the most progressive income tax system in the EU. The top 1% of income earners pay 24% of the total income tax and USC, the top 6% pay 44% and the top 24% pay 80% of all income tax and USC. Middle earners pay above the OECD average in tax but below average wage earners pay substantially less tax than the OECD average. The Opposition and indeed certain sections of the news media would have one believe that the tax revenue received from companies is way below what it should be, but if we deal in real facts we see that tax revenue from companies is almost the same as the OECD average. For example, we take in 8% of total tax revenue through corporation tax compared to the average of 9% in the OECD. The Department of Finance carried out a detailed study and best estimates indicate that the effective corporation tax rate in Ireland since 2003 has been 11%. If we compare that to France, which has an effective corporation tax rate of 7.4%, we can clearly see that Ireland is not abusing its position in relation to corporation tax. It is my firm belief that a low corporation tax rate attracts jobs as can be seen by the fact that IDA Ireland companies in Ireland currently employ over 174,000 people.

Fine Gael's economic plan is delivering on its promises. We are replacing all the jobs lost during the recession and are working towards 6% unemployment. We are making work pay through a combination of cuts in tax, a higher minimum wage and more affordable child care. We are protecting Ireland from future shocks by ensuring that we have a surplus in the public finances and reducing the national debt. In this regard, the forthcoming general election will be a choice between stability and progress or instability and chaos. This country needs a Government that can be trusted to secure the recovery, not one that will put it at major risk. The real facts show that this Fine Gael-led Government has been fair in its approach to bringing the country's finances back under control. We have maintained the core welfare rates of jobseeker's benefit, carer's allowance and the State pension. We have removed 410,000 low-paid workers from the dreaded USC and plan to remove even more. We have cut income tax rates for everybody earning less than €70,000 and restored the minimum wage with plans to increase it.

While I have concerns about some aspects of the issues raised here this evening, the publication of the final BEPS reports along with our commitment to implement the various findings will go a long way to closing any loopholes that exist. What is most important for us now is to secure the recovery that is currently taking place. The recovery is fragile and not enough people are feeling the benefits yet. We must ensure that everyone in all areas benefits from the recovery. We need political and economic stability. Only a Fine Gael-led Government can provide this.

Deputy Áine Collins

I welcome the opportunity to speak on the motion. It is a very important motion albeit I disagree totally with what the Opposition is saying about corporation tax in Ireland. For an Opposition that believes solely in providing jobs and helping the less well off, I cannot understand why it would bring such a motion before the Chamber.

The corporation tax rate of 12.5% is the most transparent in Europe. The effective rate of corporation tax in Ireland is approximately 10.5% and the difference between that the corporation tax of 12.5% is research and innovation, which are crucial for growth. We have been very fortunate in Ireland. I live in a town called Millstreet and we have a company there called Alps. It has been there since Apple originally came to Ireland and set up in Millstreet. Apple moved to Hollyhill in Cork where it now employs more than 3,000 people directly and in excess of 6,000 people indirectly. It is a major driver for the whole region. While people talk about multinationals being attached to cities and not rural Ireland, Alps in Millstreet employs 600 people, which is very significant for an area like ours. All those people live within a 15-mile radius of the town and their employment supports families. They have been very fortunate in that their company has been able to grow during the economic downturn. In fact, most of the multinationals were the backbone of the economic recovery. People forget that they are supporting small businesses because they have suppliers and outsource a great deal of their work. They are very important in their support of transport companies, data analytics and so much more, which we sometimes forget. While it is brave to come to the Chamber and say these big multinationals should pay more tax, people forget that companies like Alps and Apple pay PRSI on every employee, contribute to local community events and help develop skills among people who often go on to set up their own businesses. Those businesses become another growth path for entrepreneurship.

Multinationals do not make a decision today to open in Ireland next week. They make that decision three years before it happens. What is important for them is consistency, stability and a guarantee in relation to the 12.5% rate. That is not the only reason they come to Ireland. They come here because of our skills, our English-speaking population and our extremely transparent regulatory system. Recently, we passed a new Companies Act 2014 which is accessible, easier to understand and makes it easy to do business here. Our regulatory system is very transparent as is our tax system. As someone who did a great deal of work in the tax system in a previous career as a tax consultant, I note that it is extremely complex. I commend the Revenue Commissioners who were probably the most progressive arm of the State in the innovation they brought forward in the 1990s. Their technology is superb and I have always found them fair, open and easy to deal with. The motion also refers to accounting standards in Ireland. The accounting and auditing standards in Ireland are the international standards. They are the same as they are around the world and they are very open and effective.

The important thing is stability, which is one of the reasons people come here. They want to open and expand here. I am very fortunate in the constituency I represent that Ballincollig is doing extremely well. We have had announcements from eSentire and Asystec, a home-grown Irish data management company. The reason they are there is that we also have the likes of EMC, which is a multinational employing in excess of 3,500 people in the area. These companies affect people who live down the road from me in rural Ireland and who travel in and out. People forget how important that is to the wider economy. It is very easy to make statements like the Opposition has made tonight.

One of the great things we have led with is the knowledge box, which is important in relation to stability. The knowledge box will be a great success and increase our tax take from multinationals.

Again, it is down to stability and security, as a knowledge box provides people with a guarantee on how to grow and progress when they are planning a number of years ahead.

I welcome the opportunity to contribute on this motion. The corporation tax rate is important to our economy, our people and jobs. Having a job, being respected and being able to grow and train are the most socially useful factors for anyone. Multinationals are superb at offering training.

Deputy Anthony Lawlor

Like others, I welcome the opportunity to contribute on this debate as it is important that we discuss the economy. We do not get many opportunities to do so. Before I was elected in 2011, I was given a brief tour around a major multinational in Leixlip, Intel. I was impressed by the staff, their youth and their quality. I asked one of the managers whether the staff represented the key reason for Intel staying in Leixlip. He told me that they were an important asset, Intel could avail of certain infrastructure in the area and it had the co-operation of the IDA and Kildare County Council, but that the key factor was the settled corporation tax rate of 12.5%. Intel provides 5,000 jobs. In the subsequent four years, it invested €5 billion in the Leixlip plant. If we did not have a 12.5% rate, would that €5 billion have been invested?

Shortly after Deputy Enda Kenny became Taoiseach, he attended a meeting in Brussels. A key request made of him, particularly by the then French President, Mr. Sarkozy, was to increase our corporation tax rate because France believed that it gave us an unfair advantage. Little did we know at the time that, when analysed, France's effective tax rate was 7.5%. Our effective rate has proven to be close to 12.4%. If research and development activity is excluded, the rate is approximately 11%. From this perspective, Intel's €5 billion investment was based on the certainty that Ireland would maintain its 12.5% rate.

People have referred to multinationals. Deputy Catherine Murphy was with me last week when we opened an Irish multinational's facility in Naas. One reason for its presence was the corporation tax rate. Other areas had battled for it and similarly offered incentives. I was delighted to be present for the facility's opening. Not only were 800 young, progressive people working at the facility, earning high salaries and making PRSI and income tax contributions, but the multinational announced a further 100 people to be employed in 2016 and the future relocation of some of its other facilities to Naas. This is encouraging and is based on our strong resolve to retain our 12.5% corporation tax rate.

We must consider global corporations. I welcome the OECD's statement that countries that make profits in countries should pay taxes in those countries. I am referring specifically to African countries. Companies that take advantage of situations in Africa should pay their fair share of tax in African countries because it is important we help developing countries back onto their feet. We must prevent economic migrants from being forced to traverse the Mediterranean Sea in flimsy boats. It should be our objective to set up a tax regime in those countries in order that they might benefit from whatever profits are generated by companies there. While we are sending some assistance in this regard, for example, through the Revenue Commissioners, I hope we can send more to help our African brethren to get the best benefit from those companies that take advantage of their situations. With our knowledge of our effective tax rate of 12.5%, we can instruct African countries in particular in how best to collect taxes from multinationals.

I support our strong stance on our corporation tax rate. It sends a clear signal of stability to foreign and Irish multinationals as well as to small Irish indigenous companies. If the Opposition were to get into power, the stability for which most companies look would disappear.

Acting Chairman (Deputy Liam Twomey)

Deputy Finian McGrath is sharing time with Deputies Catherine Murphy, Ross, Clare Daly and Fitzmaurice.

Deputy Finian McGrath

I thank the Acting Chairman for the opportunity to contribute on what is locally and internationally an urgent and important debate on tax. Many of us want a tax system that is fair and equitable. I thank and commend Deputies Maureen O'Sullivan, Joan Collins and Boyd Barrett on introducing this motion as we need to have an honest and open debate on tax justice and the requirement for a society built on social justice. Contrary to what some Deputies have claimed, we are not trying to drive out multinationals. A fair and transparent system must form part of that social justice plan. What is wrong with that?

The motion proposes solutions. We need to be brave and consider some of these. Too many have suffered in the past five years, with the weakest often suffering the most. That is unacceptable. The richest and most powerful devise schemes and other stunts to avoid paying tax or to ease the pressure on themselves. There is a growing international consensus that aggressive tax avoidance and evasion by some corporations is a major contributory factor in the staggering increase in global economic inequality. This is what I am concerned with. I am not trying to close down any business or stop foreign investment. We are discussing inequality in broader society. The global trend of increasing economic inequality and poverty is echoed in Ireland. Recently, the Think-tank for Action on Social Change, TASC, estimated that the wealthiest 10% of our population owned 42.3% of all wealth whereas the bottom 50% owned only 12.2%, with a dramatic increase in levels of deprivation, poverty and homelessness in recent years. For example, 750,000 people, including 232,000 children, now live in poverty. This is why we discuss tax. Tax should be about the distribution of wealth in our society.

There is a concern that Ireland's low corporation tax rate and company regulatory regime do not support adequate accountability on the part of companies that operate out of Ireland. Many Deputies have friends and family members working in the companies in question, but that does not mean the companies should not pay their fair share of tax. The exchange of information between tax jurisdictions is not automatic. It is also a concern that the recent European Commission investigation into Apple in Ireland revealed a lack of transparency and accountability on the part of Revenue to the people of Ireland.

In addition, there is concern that Ireland is part of a network for international corporate tax avoidance and evasion, as demonstrated by the so-called LuxLeaks scandal and the widely criticised "double Irish" tax arrangement. These are the issues in respect of this broader debate.

One also hears the suggestion that Ireland has a highly progressive tax system, but of course that word is often distorted. It has a progressive income tax system, but what about the corporate, property and wealth taxes, as well as VAT? Income tax constitutes 41% of the tax system, and the people at the bottom of the tax system pay as much of their income as do those at the top, but one will not hear that point from a lot of people in this debate. There is a 30% rate of indirect taxation, whereby the people in the bottom decile pay 30% of their income in indirect taxes; incidentally, the people in the top decile pay 6% in this regard. Similarly, people in the top decile pay 9% of their income in tax while people in the bottom decile pay 28%. Is that really progressive? Yesterday, Renua had its tax policy launch, at which it advocated less income tax for those who earn more. Where would one get it? It proposed a 23% flat tax, which is completely unacceptable. Most rich people make money from assets, not income, and, as Members are aware, these already are taxed under the capital gains tax regime.

My point is that Members must consider the facts and must be careful about ensuring a balance and a fair distribution of taxes. In addition, Members must deal with the reality that the tax issue is a global problem. A global problem requires a global response and, in the case of Ireland, a response right across the European Union. Members have had sight of the BEPS proposals. Will they lead to greater losses of taxation revenue compared to the current amount of $250 billion estimated by the OECD? These are questions to be asked. Reasonable and moderate people are making the point that there is wealth out there. Why do Members seek the wealth? It is because they wish to remove children from poverty. Why do they seek an additional few bob on taxes? It is to do something about the housing crisis. They seek this additional money to get people off trolleys and into real beds in hospitals. Essentially, these are major issues Members should address and from which they should not run away. I again thank my colleagues for tabling this important Private Members' debate but, that said, I always support the concept of supporting Irish small businesses as a priority, as well as supporting foreign direct investment as part of the overall strategy.

Deputy Catherine Murphy

I thank Deputies Maureen O'Sullivan, Richard Boyd Barrett and Joan Collins for tabling this Private Members' motion. When the issue of achieving a more equal society is discussed, the focus tends to be on the comparison between what top income earners are paid and those who are paid at lower levels. While this is important, particularly where large multiples are involved, it diverts attention away from the real inequality, the cause of which is more about the accumulation and distribution of assets and wealth. The narrative is destructive because it pitches people who often are earning quite modest incomes against other workers. What has been occurring is that people on the lowest incomes have become poorer, as evinced by the growing number of children who are living in poverty. At the same time, the incomes of a large number of those who are termed middle-class have been hollowed out. Post-crisis Ireland is much more unequal than it was before the crash, which is a disgrace.

Should one aspire to a more equal society, and if so, why? According to works such as The Spirit Level, when one considers the evidence, the more equal societies, such as the Nordic countries, produce better societal outcomes and better mental health outcomes and have lower levels of drug use. As for obesity, the term is "The wider the income gap, the wider the waist." These countries have better educational performance and lower crime rates, and the list goes on. The authors of The Spirit Level, Wilkinson and Pickett, wrote the book following 20 years of international research. It is easy to perceive why one would seek a more equal society when it delivers such good outcomes. While there is no doubt that great wealth has been created in Ireland, the problem is how that wealth is distributed. The levels of inequality that were so well demonstrated in the RTE programme recently produced by David McWilliams are not unique to Ireland. During the summer, I re-read Joseph Stiglitz's book, The Price of Inequality, and apart from the people named and the subject country, the pattern was pretty much the same internationally. Professor Joseph Stiglitz won a Nobel Prize in economics and formerly worked for the World Bank as its chief economist. In the book, he details the profound consequences of both the current financial meltdown and the previous decades of neoliberal interventions on the incomes, health and prospects of the 99%, as well as the damage done to values, fairness, trust and civic responsibility. How do the 1% accumulate the wealth? This was graphically described in the aforementioned programme. For example, when one considers NAMA and the IBRC, the Government shortened the time for the disposal of assets. As property values were rising, there was a rush to dispose of the NAMA and IBRC assets. It appears this was a factor in the bundling together of large groups of distressed assets that are being sold below par in what appears to be a fire sale. The result is that a small number of super-wealthy people are being made richer, and they are then free to sell on the same assets for a profit to others who would have paid more for them individually or in small bundles. Moreover, some of them, such as Project Arrow, contain a large quantity of residential properties, some of which are in the right locations to deal with the current housing and homelessness crisis.

The Nordic countries offer a good example because they attract a good share of foreign direct investment. They have good, stable economies with good public services, yet they have higher levels of corporate taxation, for example. As to why they attract this investment, it is because they have good public services and good educational attainment. If we take our eye off that ball, the 12.5% rate will not matter if we lack the people who will work in those multinational firms. This is possible unless we invest in third level institutions and right through the education system. Where will this tax come from? I attended a briefing by IBEC recently at which it called for significant investment in third level education while simultaneously highlighting areas in which there is inadequate ability to bring in more taxation. I raised that very point with it - namely, that the key issue is not the rate of 12.5% but the amount some companies are paying in corporation tax. This is the money society needs to invest in infrastructure, be it public transport, housing or education. This is what will sustain us into the future. I believe the key issue is bringing in the full 12.5%, rather than the actual rate of 12.5%.

Deputy Shane Ross

When I heard that Deputy Boyd Barrett was sponsoring a motion on multinationals, I instinctively thought I could not live with it comfortably. However, having read its text and having noted its moderate tone, I must admit I find it pretty palatable and reasonable. I do not understand why the Government cannot accept it because really, if one considers it in its raw form and strips out much of the verbiage in it, it is a requirement more for transparency than for anything else.

Multinationals have a highly chequered history in Ireland. They came here, were very unwelcome and became hate figures in certain circles. They were looked upon as exploiting Irish wealth, riches and assets while taking those assets and profits overseas and leaving a minimum here, or basically pillaging the country for profits overseas. They were also perceived as being particularly anti-trade union and not taking on unionised staff.

To this day that remains the model of multinationals. The model of our native industry is very different, with one or two exceptions. There was a clash of cultures which existed here for a long time, but that obviously developed over a period as the multinationals came in and gave an enormous amount of employment to native Irish people who were happy to accept that employment. In some cases they were extraordinarily well paid. They were extremely content and very productive in their work, but they lived in a different world from those who, for instance, worked for semi-State companies. That does not mean that one is necessarily any better than the other, but it meant that we have in our midst after a period of time - encouraged by successive governments - embedded in the economy a different type of culture from which it would be difficult to disengage.

We had to accept them and, indeed, I suppose an indication of that was that when multinationals did withdraw, whole communities were destroyed. Employment in towns and villages was decimated and they left a hole which in certain instances has never been filled. They are here to stay under certain circumstances and conditions, and although they are here to stay and are welcome, they are super strong - maybe too strong in terms of economic muscle. We may not love them but we have to accept them. The question that now has to be asked, and Deputy Maureen O'Sullivan and others are asking it, is whether Ireland has become more a tax vehicle for multinationals rather than a home for production or anything else.

The indications are that, whereas they are doing an enormous amount of good in giving employment, in making profits and all the spin-off effects, in certain high profile cases they are using Ireland more as a tax vehicle than for anything else. Everybody is familiar with the issue of Apple. Everybody is also familiar with the issue of the double Irish, which the Minister quite rightly abolished last year. Despite this, there are figures that really are quite staggering. I will point out one, for instance, from last year involving Microsoft. These are 2014 figures which I have picked out simply to illustrate the case. That company's cost of sales for the year was €2.8 billion, while administrative expenses were €17.9 billion in Ireland. That is simply ridiculous. I am quoting from The Irish Times which asked a question about it. It said that these administrative figures are most likely royalty and other intellectual property payments made to other Microsoft companies not tax resident in Ireland. I think they are the Netherlands and Luxembourg.

It goes on to say that there is no explanatory note about the expenses in the accounts and a request for a comment on the matter had not been responded to at the time of going to press. An administrative expense of €17.9 billion, which is actually an intellectual property payment or a patent royalty payment, is an artificial tax transaction, nothing else. That means that what they are doing, and everybody knows that this is what they are doing, is buying a bit of intellectual property from Bermuda, paying for it out there, leaving the money out there - it never goes back to America - and taking it out of the Irish economy. It is an artificial tax transaction which is entered into their books as something which it really is not. It is down there to avoid tax.

Let us be absolutely clear that it is not illegal, but it is a source of income which we should be looking at as potentially one in which we should have a large share. I think the motion is wrong in saying that they should give the Revenue Commissioners powers to do this. If there is tax avoidance going on, the Revenue Commissioners have the power to challenge it. The question is why they are not using it.

Deputy Clare Daly

I compliment Deputies Maureen O'Sullivan, Joan Collins and Richard Boyd Barrett on tabling this issue for discussion. It gets to the heart of what type of Ireland we want to live in. That is entirely appropriate as we are on the eve of a general election. As Deputy Ross has said, it is not a revolutionary programme. It is a modest proposal against the backdrop of a Government which on nearly every issue tells us that we must comply with Europe, be it on water charges or whatever. However, when it comes to the issue of corporation tax, it is sacrosanct and untouchable. Nobody can dare to ask them to pay even a modest amount of cash. That is the backdrop to this discussion.

There is no secret whatsoever about the reality that Dublin has been known as a key tax avoidance centre for multinational companies. The brass plate goes up in the IFSC, with mythical employees and the channelling of profits through Irish subsidiaries to minimise tax liabilities. That is a fact and is not disputed.

Last weekend, we even had the example of the now infamous Cerberus which is in prime position to buy up yet more real estate at a knock-down price in the South of Ireland, having done so in the North of Ireland. Its tax figures were revealed at the weekend whereby it carries on this activity through 11 Irish companies. In 2013 and 2014, it had a turnover of €224 million and paid the princely sum of €10,000 in taxation. An average worker on a modest wage has probably paid more in taxation than Cerberus paid in Ireland in that time. That is what we are talking about - the glaring inequality in taxation in this State.

The name that Ireland has got for itself means it has undermined regulation and has contributed to the crash. It is utterly shameless. I had the privilege, or misfortune, of watching David McWilliams's television programme on RTE a couple of weeks ago with my daughter who has just gone into fifth year and has started studying economics for the first time. She would already have been subjected to some of the analysis we heard on the other side to the effect that taxation has to be encouraged to bring these companies in to get jobs and all the rest of it. She nearly fell off her seat at the evidence given there of multinational companies whose average profit per employee was $970,000 while average taxation per employee was $25,000. That is an effective rate of 4% when families and workers are paying considerably more. Citizens are meeting the deficit for that. The analysis set out the sharp increase in the proportion of taxes paid by ordinary citizens through social charges, indirect charges on consumption, the property tax and so on. We have to be clear about this. The theory that lower corporation taxes increase the incentive and capacity of business to invest is just not true. There is no evidence to support it.

Michael Burke did an excellent contribution to the Notes on the Front blog where he said that according to the OECD, a weighted average of the main corporation taxes applied in member states had fallen progressively over the past 32 years. In 1981, the average rate was 49.1% while in 2012 it was 32.4%. This was in a period of severe economic crisis. Low taxes are not proof against economic crises. We obviously do not have time to develop the points, but ironically the strongest year of Irish growth was 1997, which was six years before the 12.5% corporation tax was brought in. The argument that lower tax rates lead to higher investment has been disproved throughout the entire OECD area which has experienced a decline in growth over the past 30 years.

I think it is shameless that we would market this country as a sort of nodding Uncle Tom that bends the rules and doffs the cap to any establishment that would come in and throw us a few bob. Why can we not behave like a sovereign, independent nation? That type of approach is filtering through in all aspects of or economy and not just in terms of taxation. Ryanair's chief executive, Michael O'Leary, has been lauded as somebody who pays his tax here, but in reality he is about the only Ryanair employee who does pay his taxes here.

The company has orchestrated a situation whereby all its employees are nominally self-employed and are supposed to be employed in Ireland, even though they work in other countries. They avoid paying tax in those countries and the company can afford to pay them less. That is the reality. We have become famous for low standards and a race to the bottom.

I compliment the team for putting through the motion. There needs to be a complete overhaul. Those with the resources need to pay more. They are not doing so, but if we want an equitable and fair society then it has to be done. The rate has more than passed its sell-by date.

Deputy Michael Fitzmaurice

I thank Deputy O'Sullivan, Deputy Boyd Barrett and Deputy Joan Collins for this motion. I have made it clear that the 12.5% corporation tax rate should be left alone because we need to encourage business in the country. However, the rate should be adhered to. There is no good in Irish companies throughout the country trying to survive - they start off and go through the first three years of tough going after the company is set up first - only for multinational companies to come in and get sweetheart deals. Basically that puts them on an unfair footing. We should treat all our people equally.

As a country we have concentrated on the multinationals through the years. They are here and there is no point in saying otherwise. We need them at the moment. However, Ireland needs to have a strategy for when something goes wrong. When something goes wrong with a multinational - we have seen it in Limerick and other counties - it is like a bomb hitting an area. The devastation it causes is unbelievable for families, the Government and the entire area and it takes so long to replace those jobs. We need to keep concentrating on Irish companies, especially small and medium-sized enterprises, to ensure we create as much sustainable employment as possible. The reason is simple. If something goes wrong with a company of ten or 20 people and it does not survive, at least it is far less damaging than 1,000, 2,000 or 3,000 jobs going in one shock announcement.

The relevant people in Ireland should always remember one thing. Some multinationals thought they could abscond to other countries. Indeed, the European Union subsidised them to go to the other countries. However, one thing they found out is that our people and the education we have as a country are valuable. We can sell this.

If we adhere to the 12.5% corporation tax rate, that is fine, but we see figures such as 2%, 3% or 4%. It is like a corridor of money coming in and going out. Some of the figures we see look good but that does not create jobs. It is simply a paper exercise and paper exercises do not create jobs in this country. Basically, we need manufacturing or something else.

Concerning media reports suggest we may be held with a gun to our head by some multinationals on the pharmaceutical side with demands on the price of products in exchange for staying in the country. We have one of the most competitive tax rates in Europe. The 12.5% rate is a good thing but I do not believe in a payback with the implication that we buy the stuff from a given company "or else". We are a gateway and a corridor to Europe for many countries. There is a young population with good education here and we have many things going for us. We need not sell our souls even more in this way.

I compliment the Deputies once again for putting this together. As Deputy Ross said, Revenue has the powers to investigate all of this. The door is closing now. Europe has subsidised some companies to leave this country. I understand they gave €50 million to one company to go to another country in Europe and caused devastation in the Limerick area. Now, Europe seems to be closing the door on pulling everyone to a halt. I gather there are question marks over what has gone on in Portugal. There are question marks in many countries and it may be a good thing to have a common denominator.

I urge the Minister to ensure, no matter what we do as a nation and no matter how Europe tries to bully and intimidate us, as they have done for many years, that Ireland stands firm on the 12.5% corporation tax rate. We are an island. I believe companies should pay the 12.5% rate but I do not believe a company that comes here should get an advantage over an Irish person who is starting up.

I have heard various media reports about people from various countries suggesting that Ireland should look at this, that or the other and I have heard calls to harmonise the tax rate in Europe. We need our identity and we must hold on to that. Regardless of what has to be done, we need to ensure that we are not driven down a road in Europe by having to raise the rate. We need to create even more employment, especially in the countryside.

Minister for Finance (Deputy Michael Noonan)

I thank all Deputies who contributed to the debate on this important subject. We heard a wide range of perspectives and I believe this diversity of views enriches the debate. I cannot address all the points made by Deputies in the time available but I am keen to respond to some specific points made.

Deputy McGrath discussed Ireland's corporation tax take as a percentage of GDP and as a percentage of total tax revenue. I welcome Deputy McGrath's acknowledgement that our corporation tax receipts are in line with or even above the relative percentages in other EU and OECD countries.

Corporation tax receipts to the end of September of this year were almost €4 billion, a 45% increase on the same period last year. While these figures can be difficult to interpret, our analysis suggests that the greater-than-expected performance in the year to date is broad based and primarily relates to improved trading throughout the entire economy. These strong corporation tax receipts underline the important contribution businesses make to the Irish economy.

Deputy McGrath and Deputy Boyd Barrett rightly highlighted concerns about multinational profits being shifted to tax havens, in particular through how transfer pricing rules are applied. Addressing this concern has been a key focus of the base erosion and profit shifting project. Changes to the OECD transfer pricing guidelines as a result of the BEPS project will significantly reduce the ability of multinationals to shift income to cash box companies in tax havens. The BEPS package revises the guidance on the application of transfer pricing rules to prevent taxpayers from using so-called cash box entities to shelter profits in low or no-tax jurisdictions.

It has been recognised that the existing international standards for transfer pricing rules can be misapplied so that they result in outcomes in which the allocation of profits is not aligned with the economic activity that produced the profits. The BEPS reports have targeted this issue to ensure that transfer pricing outcomes are aligned with value creation. This corresponds with Ireland's tax strategy, whereby we seek to align the right to tax with real economic substance and activity.

Deputy O'Sullivan raised the question of the UN being recognised as an international body on tax. The Irish position has always been that the issues of base erosion and profit shifting are best addressed by a multilateral solution and that the OECD has the recognised international experts in this area. It is, therefore, important that the work of the EU, the UN or other intergovernmental work on tax takes into account the ongoing work at the OECD, and that a twin-track and potentially conflicting approach is avoided.

Ireland is a small open economy with a heavy concentration of foreign direct investment. The 12.5% corporation tax rate is critical to supporting our economic recovery and employment growth. Research by the OECD also points to the importance of low corporate tax rates to encourage growth. In ranking taxes by their impact on economic growth, corporate tax was found to be most harmful.

I urge Members of the House not to conflate or confuse the policy of attracting foreign direct investment with a policy of tolerating aggressive tax planning. Just because Ireland attracts high levels of foreign direct investment does not mean that we encourage base erosion and profit shifting or aggressive tax planning. Yesterday, the Minister of State, Deputy Harris, outlined in detail the measures we have taken to improve our tax system and protect our reputation, including our engagement in the OECD BEPS project and our plans to implement its recommendations.

As I said earlier this week, and as the OECD recognised, Ireland will be one of the first countries to introduce country by country reporting in line with the OECD’s recent recommendations. We have always supported a policy of fair tax competition, within the confines of the international rules and principles in this area. I thank Deputies for their sincere engagement with the debate and their comments. I commend the Government’s counter-motion to the House.

An Ceann Comhairle

Deputy Mick Wallace is sharing time with Deputy Maureen O'Sullivan. They have 15 minutes between them.

Deputy Mick Wallace

I have five minutes and Deputy O'Sullivan has ten.

An Ceann Comhairle

That is fine.

Deputy Mick Wallace

The Minister made the point that Ireland is a small open economy with a heavy concentration of foreign direct investment. We acknowledge that there is a heavy concentration of foreign direct investment, but does the Minister not think that one of these days we will have to put a bit more thought and investment into indigenous industry rather than be forever dependent on strangers?

The Minister referred to the importance of low corporation tax to encourage growth. The sad part of that is the fact that large business pays less tax now than it used to. A frightening statistic is that the corporation tax paid in the late 1940s in America represented seven times more of the overall tax take than it does now. There is a race to the bottom, where we are all competing to create employment and to attract companies which will create employment. It is almost a case of having to pay companies to come into the country to provide employment.

We have to ask ourselves what sort of world we want to live in. I accept that things are not much different, in lots of ways, anywhere else, but there is a problem. Society is organised in such a way that, whether we like it, there will always be a lot of people who will need help from those who can give it. Society breaks down if we do not care about the people who are in difficulty and need our help. Some of us are in a better position to look after ourselves than others. No Government can do that without a healthy tax take from those who can afford to pay.

We discussed the lack of social housing earlier, something which is causing incredible problems. Social housing depends on Government spending. We accept that money does not grow on trees, but I cannot for the life of me understand why the EU does not encourage states to invest in infrastructure without placing a financial burden on the books. The Minister is under pressure, given the 3% rules, but I find it incredible that the EU does not change that structure so that infrastructure is something that all states are encouraged to engage in.

The fact that we do not have a child care system creates serious inequality and means that, to a great degree, women remain second class citizens. A child care system like that in Germany would be revolutionary for Ireland and would make a wonderful and positive difference. It would be worth anything.

We all recognise that serious inequality is a problem for all of us, even those with loads of money in their pockets. There are more problems to deal with, higher walls need to be built, more money needs to be spent on security and there is more fear because those who have nothing will be encouraged to take from those who have. It is in the interests of all of us to make sure that everybody is in a better place, and that requires more of a tax take. I would be in favour of increasing corporation tax from 12.5% to 15%, and I do not think American companies would flee the country.

Deputy Maureen O'Sullivan

Gabhaim m'aitheantas agus mo bhuíochas leis na Teachtaí Dála a ghlac páirt sa díospóireacht. Agus an buiséad ag teacht agus leis an tuarascáil a fhoilsíodh ar an Luan, is rud dearfach é go raibh an díospóireacht seo againn anocht agus aréir.

I acknowledge the work of NGOs like Christian Aid, Trócaire, Oxfam, the Debt and Development Coalition Ireland and Attac who do such tremendous work on tax justice. This Private Members' motion was worked on by Deputies Boyd Barrett, Collins and myself, with the support of other Members of the Technical Group. We can all agree that it is essential that we have a fair taxation system in our country, which is fair to individuals and large corporations. In May 2015, the Lux leaks scandal resulted in a number of protests about how corporate secrecy undermines global tax collections across the world, including in the poorest countries. One banner said it all, namely, that we want to see what multinationals pay in tax, which is what is at the centre of this motion.

The Minister acknowledged that there has been an increase of 45% in the corporate tax intake recently, and he outlined his reasons for that. I suggest, however, that it is because issues like tax transparency, accountability and good governance are coming more to the fore that multinational companies are beginning to think and engage as they realise that their reputations are at stake. What was disappointing in some of the debate was the way in which it was suggested that those of us who tabled the motion are against foreign direct investment and want to increase corporate tax to such an extent that it would drive foreign direct investment away. We are all for job creation, but companies must respect workers' rights and pay fair taxes.

We made the point that tax systems that lack accountability and transparency are exacerbating inequality, and economic inequality compounds the other inequalities in health and education, not to mention the extent of the revenues that are lost through unjust tax systems. There were quite a number of examples of tax injustice highlighted in the course of the debate. Many examples showed where multinationals have played countries off against each other to make sure they only paid low levels of tax.

On the rate of 12.5%, even a modest increase would make a big difference but, leaving the increase aside, we have to collect the full 12.5% and also need to see the figures at the end of each year. A speaker mentioned Medtronic yesterday, an American medical devices company that acquired Covidien. It is reaping the benefits of lower taxes here, but has been quietly shedding jobs in a number of places in this country and there are concerns that it will continue to do so. It does not, of course, recognise that its workers should have any union rights. It obviously sees Ireland as a tax haven. We would welcome it, provided it respects workers' rights and paid its just taxes.

The OECD base erosion and profit shifting, BEPS, report purports, as the Government amendment states, "an internationally agreed approach to combatting aggressive tax planning and harmful tax practices". The OECD stated up to $24 billion is lost annually by governments around the world because of aggressive tax planning by multinationals. What is needed now are aggressive tax justice measures to ensure an end to this. This is what the motion is about. Will BEPS achieve this? It goes a considerable way towards bringing about change, but it does not go far enough. We are agreed on country-by-country reporting, but for it to be effective it must be done publicly. Even the European Parliament voted overwhelmingly in favour of this information being available.

Yesterday evening, the Minister of State, Deputy Harris, said the reason against the information being available publicly was "to protect the confidentiality of potentially sensitive information" but as we know, the European Commission is investigating this. The Minister for Finance and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, received a letter from a group of NGOs, including those I mentioned and Transparency International, ActionAid and ICTU, stating that ending the secrecy surrounding tax payments and the economic activities of multinational corporations is a crucial step towards re-establishing trust in our tax system. It also stated this would bring about corporations paying their taxes in the jurisdictions where they operate and this would lead to financial stability and development. It would also give the public information on these multinationals and the contributions they make or do not make. It would also show lawmakers whether there were loopholes in tax systems that had to be addressed. It would help investors because they would have a fuller picture of companies and it would also help make a more level playing field for domestic businesses trying to compete with multinationals which have so many strategies at their disposal. It is hard to see why Ireland did not support the public country-by-country reporting. Going back to the banner, we want to see what multinationals pay.

Yesterday, the Minister of State mentioned the OECD BEPS process sought to involve developing countries, but I must ask whether it really listened to the voices from the global south because my understanding is there was a feeling it was just a public relations exercise. No notes were taken when the countries from the global south were there, and their issues on exploitation by multinationals depriving them of much-needed revenue is not addressed by BEPS.

I asked about the toolkits the OECD states it will develop. The spillover analysis of the impact of our tax system is very positive, but are we giving with one hand and taking with the other given the complexity on the tax issue?

The Minister has addressed the question I asked yesterday as to why we did not support the intergovernmental body on tax under the UN called for by so many NGOs. If we had been really serious about transparency and accountability in tax matters and good governance, we would have given it much more support than we did. If tax avoidance were tackled, it would enable developing countries to mobilise greater resources for development. We went for the OECD best package country-by-country reporting but not for it to be made public.

There is one way we can regulate, not eliminate, the increasing influence of the multinationals, and this is if we in Ireland implemented or developed our own national action plan to implement the guiding principles on business and human rights. Work is being done on this but it is taking quite a long time. At the very least, State-owned companies with an overseas presence should establish human rights due diligence. We should not go any further with the transatlantic trade and investment partnership, TTIP, until there is a robust assessment of the human rights aspects of it. At the very least we should oppose the inclusion of the investor state dispute settlement mechanism because it puts corporate rights over citizen rights.

The UNHCR notes 1.2 billion people live on $1.25 or less a day and 2.7 billion people live on less than $2.50 a day. This is in a world where we have resources many times over what is required to eliminate global poverty. One of the resources is tax. In 1990, the illicit financial flows were $9.7 billion, in 2008 they were $26.3 billion and they are now approaching $1 trillion. We are supposed to be happy the OECD BEPS will change all of this.

Ireland took a leadership role in facilitating agreement in the recently endorsed sustainable development goals, but the next step is the policy decisions which will see these implemented. Goal 16.4 commits action by 2030. This is too far away because too much damage can be done in the meantime. The aim of this goal is to reduce significantly illicit financial and arms flows because it will be very costly to fund the strategic development goals. Stopping illicit financial flows is a very viable and lucrative source of income as they are reckoned to be $1 trillion. This is what the Private Members' motion is about. It is about fairness and justice across the board when it comes to tax. Just tax policies and systems contribute to equality, combating poverty and tackling discrimination. It is hypocritical of us as a member of the United Nations Human Rights Council where we are very well respected for our development aid because it is untied. We should have the same strong voice when it comes to taxation justice.

Amendment put:

The Dáil divided: Tá, 83; Níl, 27.

Tá

• Aylward, Bobby.
• Breen, Pat.
• Bruton, Richard.
• Burton, Joan.
• Butler, Ray.
• Buttimer, Jerry.
• Byrne, Catherine.
• Byrne, Eric.
• Calleary, Dara.
• Cannon, Ciarán.
• Carey, Joe.
• Coffey, Paudie.
• Collins, Áine.
• Collins, Niall.
• Connaughton, Paul J.
• Conway, Ciara.
• Coonan, Noel.
• Cowen, Barry.
• Creed, Michael.
• Daly, Jim.
• Deenihan, Jimmy.
• Doherty, Regina.
• Dooley, Timmy.
• Dowds, Robert.
• Doyle, Andrew.
• Durkan, Bernard J.
• English, Damien.
• Farrell, Alan.
• Feighan, Frank.
• Ferris, Anne.
• Fitzgerald, Frances.
• Fitzpatrick, Peter.
• Fleming, Sean.
• Gilmore, Eamon.
• Hannigan, Dominic.
• Harrington, Noel.
• Harris, Simon.
• Hayes, Tom.
• Heydon, Martin.
• Humphreys, Heather.
• Humphreys, Kevin.
• Keating, Derek.
• Keaveney, Colm.
• Kehoe, Paul.
• Kelleher, Billy.
• Kelly, Alan.
• Kitt, Michael P.
• Kyne, Seán.
• Lynch, Ciarán.
• Lynch, Kathleen.
• Lyons, John.
• McCarthy, Michael.
• McEntee, Helen.
• McFadden, Gabrielle.
• McGinley, Dinny.
• McGrath, Michael.
• McLoughlin, Tony.
• McNamara, Michael.
• Mitchell O'Connor, Mary.
• Mulherin, Michelle.
• Murphy, Dara.
• Murphy, Eoghan.
• Nash, Gerald.
• Noonan, Michael.
• Ó Cuív, Éamon.
• Ó Fearghaíl, Seán.
• O'Dea, Willie.
• O'Donnell, Kieran.
• O'Donovan, Patrick.
• O'Dowd, Fergus.
• O'Mahony, John.
• O'Sullivan, Jan.
• Perry, John.
• Phelan, Ann.
• Phelan, John Paul.
• Ring, Michael.
• Spring, Arthur.
• Stagg, Emmet.
• Stanton, David.
• Tuffy, Joanna.
• Twomey, Liam.
• Wall, Jack.
• White, Alex.

Níl

• Adams, Gerry.
• Boyd Barrett, Richard.
• Broughan, Thomas P.
• Collins, Joan.
• Colreavy, Michael.
• Crowe, Seán.
• Daly, Clare.
• Doherty, Pearse.
• Ellis, Dessie.
• Ferris, Martin.
• Fitzmaurice, Michael.
• Fleming, Tom.
• Grealish, Noel.
• Halligan, John.
• Mac Lochlainn, Pádraig.
• McGrath, Finian.
• McGrath, Mattie.
• McLellan, Sandra.
• Murphy, Catherine.
• Ó Caoláin, Caoimhghín.
• Ó Snodaigh, Aengus.
• O'Brien, Jonathan.
• O'Sullivan, Maureen.
• Pringle, Thomas.
• Ross, Shane.
• Stanley, Brian.
• Wallace, Mick.

Tellers: Tá, Deputies Paul Kehoe and Emmet Stagg; Níl, Deputies Maureen O'Sullivan and Joan Collins.

Amendment declared carried.

Question put: "That the motion, as amended, be agreed to."

The Dáil divided: Tá, 83; Níl, 27.

Tá

• Aylward, Bobby.
• Bannon, James.
• Breen, Pat.
• Bruton, Richard.
• Burton, Joan.
• Butler, Ray.
• Buttimer, Jerry.
• Byrne, Catherine.
• Byrne, Eric.
• Calleary, Dara.
• Cannon, Ciarán.
• Carey, Joe.
• Coffey, Paudie.
• Collins, Áine.
• Collins, Niall.
• Connaughton, Paul J.
• Conway, Ciara.
• Coonan, Noel.
• Costello, Joe.
• Cowen, Barry.
• Creed, Michael.
• Daly, Jim.
• Deenihan, Jimmy.
• Doherty, Regina.
• Dooley, Timmy.
• Dowds, Robert.
• Doyle, Andrew.
• Durkan, Bernard J.
• English, Damien.
• Farrell, Alan.
• Feighan, Frank.
• Ferris, Anne.
• Fitzgerald, Frances.
• Fitzpatrick, Peter.
• Fleming, Sean.
• Gilmore, Eamon.
• Hannigan, Dominic.
• Harrington, Noel.
• Harris, Simon.
• Hayes, Tom.
• Heydon, Martin.
• Humphreys, Heather.
• Humphreys, Kevin.
• Keating, Derek.
• Kehoe, Paul.
• Kelleher, Billy.
• Kelly, Alan.
• Kitt, Michael P.
• Kyne, Seán.
• Lynch, Ciarán.
• Lynch, Kathleen.
• Lyons, John.
• McCarthy, Michael.
• McEntee, Helen.
• McFadden, Gabrielle.
• McGinley, Dinny.
• McGrath, Michael.
• McLoughlin, Tony.
• McNamara, Michael.
• Mitchell O'Connor, Mary.
• Mulherin, Michelle.
• Murphy, Dara.
• Murphy, Eoghan.
• Nash, Gerald.
• Noonan, Michael.
• Ó Cuív, Éamon.
• Ó Fearghaíl, Seán.
• O'Donnell, Kieran.
• O'Donovan, Patrick.
• O'Dowd, Fergus.
• O'Mahony, John.
• O'Sullivan, Jan.
• Perry, John.
• Phelan, Ann.
• Phelan, John Paul.
• Ring, Michael.
• Spring, Arthur.
• Stagg, Emmet.
• Stanton, David.
• Tuffy, Joanna.
• Twomey, Liam.
• Wall, Jack.
• White, Alex.

Níl

• Adams, Gerry.
• Boyd Barrett, Richard.
• Broughan, Thomas P.
• Collins, Joan.
• Colreavy, Michael.
• Crowe, Seán.
• Daly, Clare.
• Doherty, Pearse.
• Ellis, Dessie.
• Ferris, Martin.
• Fitzmaurice, Michael.
• Fleming, Tom.
• Grealish, Noel.
• Halligan, John.
• Mac Lochlainn, Pádraig.
• McGrath, Finian.
• McGrath, Mattie.
• McLellan, Sandra.
• Murphy, Catherine.
• Ó Caoláin, Caoimhghín.
• Ó Snodaigh, Aengus.
• O'Brien, Jonathan.
• O'Sullivan, Maureen.
• Pringle, Thomas.
• Ross, Shane.
• Stanley, Brian.
• Wallace, Mick.

Tellers: Tá, Deputies Paul Kehoe and Emmet Stagg; Níl, Deputies Maureen O'Sullivan and Joan Collins.

Question declared carried.