That leave be granted to introduce a Bill entitled an Act to establish a permanent body to monitor, review and advise on the implementation, reform and codification of tax law; and to provide for connected matters.
This statutory body would be tasked with monitoring, reviewing and advising the Minister for Finance on matters concerning the implementation and reform of tax law and would add a significant building block to our tax infrastructure.
Since the Apple judgment, the publication of the Panama Papers and other controversies in the past two years, I have argued that Ireland needs a standing commission on taxation. If established in law, this committee would examine case law judgments, issues arising from our membership of the EU and OECD, the all-too-common controversies about the use of tax loopholes and other international tax developments.
The key aim of the Bill is to tackle once and for all the emerging international view of Ireland as a tax haven.
As a country, we are drinking in the last chance saloon with regard to how we participate in international tax justice and progress. This is what this vital tax infrastructure proposes to address. The new body would also be charged with commissioning research and analysis, and advising the Minister. It would promote tax equity, seek to protect the revenues of the State and facilitate enterprise, while simplifying the operation of the law and enhancing compliance. It would allow the State to play catch-up with many of the legal and accounting tax advisory firms, which are always at least three steps ahead of Revenue in planning schemes, some of which involve extremely aggressive tax planning and significant reductions in tax income to the State.
Recent international studies can no longer be ignored or downplayed by the Government. As the recent Coffey report shows, Ireland has made significant progress in the area of tax. However, the growing view of Ireland as a tax haven, as argued in recent academic studies, has to be addressed definitively. In the Labour Party's two most recent alternative budgets, I outlined concerns, since echoed in a recent report of the Committee of Public Accounts on corporation tax, about the need for reform and oversight. One of the first tasks of the proposed commission would be to examine the recommendations of the Committee of Public Accounts. It is not acceptable, in this day and age, that the banks which taxpayers bailed out at great sacrifice should effectively have a tax holiday with relief from all corporation tax for up to 20 years. I have raised in the Dáil in recent years nearly all of the key issues flagged in the report of the Committee of Public Accounts, including the use of tax losses, particularly by the banks but also by the construction industry and property developers, and the high and growing cost of the research and development, R&D, tax credit, which is many millions more than what it was meant to be when introduced by the Minister.
It is clear that we still have some way to go on tax transparency and justice. A standing commission on taxation would be tasked with continuously monitoring how our tax laws are being used to examine loopholes, reliefs and avoidance structures on a rolling basis. Many of the tax structures we still have made a significant contribution to the last crash. If we are to avoid stormy water in future, we need to have infrastructure which examines whether the cost to taxpayers of some of the schemes is justifiable and whether these schemes are fair and equitable. I firmly believe that we need a commission to examine matters such as this, which should be closely and continuously monitored. Such a body would be ideally suited to this task.
I have spoken previously about having a minimum effective corporate tax rate to ensure profitable companies in Ireland cannot use accounting tricks and tax losses from the property crash to avoid paying their fair share. Other European Union countries such as Italy, France and Germany are developing individual responses to multi-billion companies which show in their accounts that they effectively pay little or no tax in Ireland, particularly in digital taxation. It is not possible to secure agreement on this issue at EU level. Ireland may be hit significantly by these changes and we do not have a mechanism in place to prepare for them. I recommend the Bill to the Dáil.