Vol. 1062 No. 8
1. Deputy Pearse Doherty asked the Minister for Finance the steps he will take to deliver on transparency and affordability in the insurance sector in the context of insurance premiums either remaining too high or increasing, and the pressure this places on households, community organisations and small businesses; and if he will make a statement on the matter. [5417/25]
The question before us relates to the ever-increasing insurance costs that motorists, homeowners, small businesses and sports clubs have to pay. One would think all is good with insurance looking at the programme for Government. Does the Minister accept that there is a fundamental problem with insurance in the State? Does he also accept that premiums are too high and are increasing for many? What is he going to do to bring about a reduction in insurance premiums and ensure affordability? In this new Dáil term, will he stop blocking my Bill that would bring accountability and force insurance companies to show whether they are passing on savings that have been made as a result of reforms introduced in these Houses?
I thank the Deputy for raising this question and for his advocacy in this area over many years. We all have a similar objective, which is to ensure that we have fair insurance premiums for the citizens of the country.
I recognise the concerns felt by many households, community organisations and small businesses across the country about the cost and availability of insurance cover. As the Deputy is aware, neither the Minister for Finance nor the Central Bank of Ireland can intervene in insurance pricing or provision under the EU's Solvency II directive. Notwithstanding this, the programme for Government, Securing Ireland's Future, commits to a range of insurance sector reforms. The publication of a new action plan on insurance reform is a programme for Government commitment. Work is already under way to develop an action plan that will enhance affordability, transparency and competition. This will build on the progress made under the 2020 action plan, which delivered key reforms such as rebalancing the duty of care, reforming the Injuries Resolution Board and introducing new personal injury guidelines. These changes have contributed to a more sustainable market, attracting new competitors like OUTsurance Ireland, Revolut and Fastnet Underwriting and the expansion of coverage to new sectors, including hospitality, SMEs, sports and leisure activities.
Since its establishment in 2020, the Office to Promote Competition in the Insurance Market which I will now chair as part of my ministerial duties, has supported the expansion of insurer risk appetite, creating a more competitive insurance sector. In particular, it helped secure insurance availability in challenging areas such as equestrian activities, the hiring of inflatables and childcare by connecting affected groups with relevant stakeholders.
Since taking up my role, I have commenced a process of engagement with key stakeholders, including Insurance Ireland and major insurers, to ensure reform-driven savings lead to lower premiums and broader coverage.
Transparency in the insurance market remains a key policy focus. The Government's reform agenda also commits to facilitating faster data release from the National Claims Information Database for private motor, employers' liability, public liability and commercial property insurance to enhance market transparency. In this regard, officials will engage with the Central Bank of Ireland to see how to achieve this aim.
The Minister of State is new in the brief but I have heard nothing from him that is new. The one factor that is constant in all of this is that people are being ripped off. Motor insurance has increased by 12% since 2022. I am sure the Minister of State knows all about the increases from having to insure his house. A significant number of people are seeing their insurance premium go up, and not only by €300, €400 or €500. What is happening in the insurance industry is ridiculous.
Insurance brokers argue that it is due to the cost of construction, but the latter has not increased to that level. The profits of this industry are at record highs. They are huge, yet the number of claims and the value of the awards that have been paid through the courts and other bodies are decreasing. What is happening here is the profits of the industry are increasing, the premiums are going up and it is punters - ordinary people - who are suffering. They are looking to the Government for action.
I introduced legislation that would force insurance companies to do what happens in the North and in Britain, which is to give an account of whether they are passing on the savings being made. Why is the Government blocking that legislation? Perhaps as a new Minister of State, Deputy Troy will stop blocking that legislation and allow it to pass.
I share the Deputy's frustration. This is an area in which I invested a lot of time during the lifetime of the previous Government. Many reforms have been introduced. It is regrettable that the level of savings we envisaged for consumers has not transpired. If we look at the CSO consumer price index of December 2024, we can see that motor insurance is 35.5% lower than it was at its peak in July 2016. It is still too high in many cases. Many reforms have been delivered. There is a commitment in the programme for Government regarding an action plan on insurance reform. Work has already commenced in this regard in the context of how we can ensure that the reforms that have been delivered will result in further reductions in premiums and to identify the new reforms that can be initiated to ensure that we have the price transparency for which the Deputy is advocating. We have the same objective, that is, to bring down the cost of insurance.
If we have the same objective, then the Government should allow the legislation that I have drafted to proceed. It passed Second Stage here about three years ago. The Government is stopping that legislation from being passed. All of the major insurance companies here are the same ones that operate in Britain, where they have to account for whether the reduced costs that the changes in the legislation there are supposed to have resulted in have been passed on. If the Minister of State is genuinely sincere in what he says, then let us work on this together.
I would like to hear the Minister of State's view on the Government's position. He will be aware that the Judicial Council has submitted its proposal to the Minister for Justice on an almost 17% increase in the value of awards. That is something which would result in awards going up. What are the Government's views in that regard?
There is no doubt that there have been many changes. I advocated for a large number of them, and we supported all of them. However, one thing we said previously is that we need to get agreement from the insurance industry about what this would mean for premiums. Industry representatives came before the finance committee and told us that if we did not see reductions of 20%, we would need to ask serious questions. There have been no reductions of 20%. Motor insurance has gone up by 12% and the cost of household insurance has gone through the roof. Public liability for sports clubs and businesses never decreased.
I thank the Deputy.
I am asking the serious questions. I am asking the Minister of State if he is asking serious questions, and if he will stop blocking my legislation.
I am asking the serious questions. I have already initiated meetings with all the insurance companies. I have met one already and I will be meeting the remainder of them in the coming weeks. I will forcefully impress upon them our expectation that they do need to pass on savings, based on the reforms that have been initiated. We want to see a further reduction in consumer premiums. Premiums remain high in many cases, but the Deputy fails to acknowledge that in some instances people who were not getting insurance previously are now getting premiums. New competition has entered the market. Those operating in areas such as equestrian sports, the inflatables industry and children's play areas who did not get insurance in the past are now getting it. Progress has been made, although I accept that it is not enough. That is the reason for the very strong commitment in the programme for Government to continue to build on the progress to ensure that we can bring down the cost of insurance.
I thank the Minister of State.
I will engage with my officials in the Department and review Deputy Doherty's Bill again. Quite honestly, what I am being told by the officials is that there is duplication and that some of the work involved has already been done. We can most certainly look at it again, however. I am happy to engage with Deputy Doherty to see how we can bring down the cost of insurance because we are all singing from the same hymn sheet in respect of this matter.
2. Deputy Catherine Connolly asked the Minister for Finance the analysis undertaken to establish the impact that proposed US tariffs on the EU would have on Ireland; and if he will make a statement on the matter. [4897/25]
Baineann an cheist le taraifí agus an rud atá beartaithe ag na Stáit Aontaithe don Aontas Eorpach, Éire go háirithe.
My question relates specifically to the tariffs. What analysis has been done on the impact of the proposed tariffs on the EU, given that Ireland, within the Union, is uniquely exposed, and in light of the policies we have adopted and our stance on Gaza. I realise things are changing by the minute regarding tariffs; they are promised and then not promised. What analysis has been done?
My Department, like finance Ministries elsewhere, is assessing the potential impact of tariffs on our economy. The assessment of our economic outlook, which will incorporate the latest developments in the global economy, will be set out in the spring forecast, which will be published in April.
From an economic perspective, the US is our largest bilateral trading and investment partner. In 2023, the latest year for which data are available, Ireland recorded a goods-trade surplus of €50 billion with the US. On the other hand, it ran a services trade deficit of €134 billion with the US across that year. As a result, Ireland recorded an overall trade deficit of €84 billion with the US.
The Government has taken careful note of President Trump's decisions in respect of tariffs in recent days and the agreement to postpone tariffs on Mexico and Canada by 30 days. We regret the imposition of tariffs. Our view is that they create economic disruption and drive up inflation, damaging those on all sides.
Moreover, it is clear that the global economic landscape is changing quickly and the new normal we are about to move into will be very different from what we have had in recent decades. Our economy has benefited enormously from the global economy getting closer. As a major beneficiary from these positive dynamics, the Irish economy is exposed to any potential reversal in global trade. From a policy perspective, the best way to respond to these trends is to focus on those policy decisions that we can control and influence. That is why our competitiveness is so important and why investing in our future remains essential.
The figures on our trade with the US, including our exports there, are something else, not to mention the figures on the services we import, which are even double those figures. The figure I have for exports to the US in 2024 is €103 billion. I am not arguing over figures at all; the enormity of the figures speaks for itself. My question is on the analysis that has been done by the Minister. He is saying it has been undertaken and that the results will be published in the economic outlook in April. I would have thought we would have been considering this more acutely now, given that what we are talking about what happened before – in 2019, I believe – when tariffs were introduced and subsequently suspended by Mr. Biden. What did we learn from that?
I agree with the Minister that our policy has brought enormous benefit to the country. However, we have been warned repeatedly that we are in serious danger of relying on a small few companies bringing in a substantial amount of tax. For a long time, we have been under pressure in respect of developing a different type of policy. Extending our policy might be better.
As I said to the Deputy, the analysis with regard to this is under way. Owing to the uncertain environment we are in, it is appropriate that a number of weeks be taken to do this work. That work will be concluded and published in April.
On the imposition of tariffs under the first President Trump Administration, two learnings emerged. First, the EU did respond. The EU has indicated it will respond again in a firm and proportional way. Second, we did see across the period in question that the trading relationship and the flow of goods and services between the US and the EU continued to be strong and, I believe, to benefit both sides of the Atlantic. It remains to be seen whether that is possible in the future.
On the point the Deputy made about our reliance on corporate tax, our reliance is why I have made the case for running budget surpluses and why we have set aside money in our two reserve funds. Maybe the Deputy might clarify her position on running budget surpluses and putting money into these funds. The question of reliance is why measures such as broadening our tax base through the changes we are making in carbon taxation continue to be essential.
I would be delighted to clarify my views on anything if I had a little more time. Specifically on the question, I am asking the Minister what analysis has been done and he is clarifying he is undertaking it and that it will be published in April. I understand the dilemma because there might be no tariffs tomorrow and it is all changing. We are dealing with a bully here.
I asked about the exposure of Ireland specifically. It is exposed for many reasons. One is that we are utterly reliant on one type of policy and approach. This has brought wealth to the country, but for a long time we have been warned that we must examine that, develop indigenous industry and consider other sources of employment. That is the part I am concerned about in the first instance.
I am also very concerned that our stand on Palestine, which I am proud of and which reflects the Minister’s words, will be used in this. We are setting up a consultative forum and an advisory panel because industry in America will have a major influence on policy. I do not expect the Minister to answer my question in the minute available, but I am anxious that we remain an independent, sovereign State and diversify our employment.
The Deputy put a set of questions to me and I answered them. She wanted to know whether we are particularly exposed to changes happening in global trade, and I said we are and outlined why. She asked if there is an analysis under way to consider risks we face. I confirmed there is, told the Deputy when it would be complete and told her how it would be published. That work is all under way.
On the challenges we face because of potential shocks to global trade and what they could mean to our economy, we do have a very strong pillar in our economy created by foreign direct investment. We also have a thriving domestic economy, a non-traded economy, and a food sector that continues to bring great benefits to our society and economy. We will continue to support those pillars of our economy as well.
We are facing uncertain times, and on that I very much agree with the Deputy, but I do not see the magnitude of the uncertainty posing a threat to our sovereignty, as the Deputy has suggested. However, we will have choices and decisions to make.
3. Deputy Pearse Doherty asked the Minister for Finance if he will deliver on election campaign promises to reduce the VAT rate for the hospitality sector in advance of the budget in October 2026, in recognition of the difficulties faced by many small businesses in the hospitality sector; and if he will make a statement on the matter. [5418/25]
This is about the reduction of the VAT rate for the hospitality sector. The Minister will be well aware that Sinn Féin was the only party to call for the 9% VAT rate for the hospitality sector in the general election. The Minister campaigned for a rate of 11%, and Fianna Fáil wished to keep the higher rate. There is a commitment in the programme for Government to reduce the rate. It has been reported that it will be 9% but the programme for Government is vague on the percentage. Can the Minister confirm the Government’s position? Will the rate be 9%? When will it come into effect? Will it be in effect before the summer, on budget day or 1 January?
As the Deputy will be aware, in making any decisions on VAT rates or other taxation measures, the Government must balance the costs of the measures in question against their impact and the overall budgetary framework.
The programme for Government is clear. It commits us to introducing measures to support SMEs, in particular in the retail and hospitality sectors. It acknowledges the increased cost pressures on these sectors and states that this will entail changes to VAT, PRSI and other measures. The programme makes it clear that these measures will be implemented as part of the normal budget process. This process will consider the timing of any VAT change as well as its scope.
The Government is very conscious of the pressures faced by businesses in the hospitality sector, and that is why we provided for a 9% VAT rate from 1 November 2020 to 31 August 2023, at a cost of over €1.3 billion. It is also why we introduced other measures, such as the increased cost of business grant and the power up grant. I wish to reaffirm, given that it is included in the programme for Government, that any such changes are matters for the budgetary process and will be dealt with on budget day.
Can the Minister offer clarification to the House and, more importantly,to the thousands of businesses across the State and the 130,000 people dependent on jobs in the hospitality sector? That sector is under pressure. We have seen 700 businesses close down since the Government increased the VAT rate to 13.5%. According to CSO employment figures released in June, the hospitality sector saw the largest drop of any sector, namely 0.9%.
Is there a reason the Minister is not committing to a rate of 9%? Everybody believes that the rate will be 9%. Is he not doing that just because it is tradition to do it on budget day or is there a question mark over whether it could still be the 11% he advocated during the general election campaign? Is it still up for debate? That is the first question.
The Minister made a commitment and recognised that there was a need to do this within the first 100 days of the Government being in office. Does he still believe that? We strongly believe that this should be done before the summer. If it does not happen then, when will it happen? Reference to the budget can mean something happening on budget night or on 1 January. What sectors will be included?
I absolutely appreciate the value of the 9% hospitality rate and the help it can offer to the hospitality sector. I understand that 9% is the rate that can have the biggest effect.
The timing of this relates to the fact that it will be a significant move. If a move is made - and my view is that when we decide the scope of that move, it should be concentrated on the food and catering sector - its overall cost in a full year will be €675 million. That is a very big decision to make. Decisions of that scale should be confined to budget day. In recent years we have had to make many significant decisions outside of the normal budgetary process. Doing that is no longer appropriate in the context of where we are now because of all the risks around us.
I understand the value of the 9% rate. My view is that it should be concentrated on those parts of the economy where it can deliver the biggest benefit. Because of the scope and scale, however, it needs to be a decision that is made on budget day.
I am very concerned about what the Minister just said. I say that because I have been in premises and spoken with hoteliers and restaurateurs. They opened up their books to me in some cases. They are expecting a reduction to 9%. They are talking to their accountants and figuring whether they can hang on. They are also talking in some cases to their bank managers. The Government was saying it would be 9%. It is not clear now whether it will be 9%. Is there a reason the Minister is not saying what everybody else said after the programme for Government was agreed? The number is not in the programme for Government. That is why I am asking the Minister the question. Can he give any comfort to people expecting a 9% rate and engaging with their bank managers and accountants on that basis that this will be the rate?
There are others, outside of the accommodation sector, such as the hospitality sector, the events industry, cinemas and so on, who were looking for this. Can the Minister clarify whether this will apply to them or is he of the view that it relates solely to hotels and catering?
I ask the question for the third time: will this take effect on budget night or on 1 January? This is important information for businesses thinking of whether they can hang on.
I understand the value of the 9% VAT rate. It is my intention to be able to deliver such a move, but such a move would entail a significant cost, which is why it needs to be part of the overall budget process. As to what that VAT rate will be applicable to, my view is that it can have the biggest impact on food and catering, as I made clear in my earliest answer to the Deputy. The expansion beyond that would entail additional significant cost, and it is because of all this that we need to make those decisions as part of the normal budgetary process. We cannot be spending hundreds of millions of euro and even more outside of the normal budgetary decisions we make because of the risk and the uncertainties around us. I want to confirm what my intention is as regards the VAT rate but indicate that this decision should be taken on budget day. Because it will be taken on budget day, any effects will be felt in the following year, from 1 January.
4. Deputy Peadar Tóibín asked the Minister for Finance if he will outline Exchequer returns and tax receipts for January 2025; and the reason they have increased since this time last year. [5104/25]
Ireland is the most exposed country in Europe as regards the potential changes in tariffs and corporation taxes with the United States. We are enormously exposed. Our dependence on a bargain-basement corporation tax economy which has been built up by the Government over the past ten years means we are now under significant threat. What actions is the Minister taking to engage with the US Government on the tariff issue and the corporation tax issue?
That is not the question the Deputy put to me. The question he put to me-----
It is related.
No. Let us be clear. The question the Deputy put to me, which is the question I will answer initially - I will go on to clarify - reads: "To ask the Minister for Finance if he will outline Exchequer returns and tax receipts for January 2025 ... " That is the question that was put to me, and I will answer it. I am happy then to elaborate beyond that on the further points the Deputy has made.
The Exchequer returns that were published last week show a broad continuation of trends observed over the course of the past few years, with the public finances - at least in headline terms - in a relatively healthy position. Tax revenues of €8.4 billion were collected in January, 7.2% up on the same month last year. When one-off revenues arising from the Court of Justice of the European Union ruling of 10 September 2024 are included, our tax revenues in January amounted to over €10 billion. Income tax and VAT recorded steady growth in January, signalling the overall strength of our economy.
On the other side of the equation, total gross voted expenditure to the end of January amounted to €9.2 billion, an increase of 22.7% on the same month a year ago. Taking into account other factors such as non-tax revenue and non-voted expenditure, an underlying surplus of €1.8 billion was recorded for January. This rises to €3.6 billion if the Court of Justice of the European Union receipts are included. This is not a source of complacency. Much of the budget surplus at present reflects the strength of corporation tax revenues, which are heavily concentrated among a small number of firms and sectors.
For 2023, income tax was roughly €33 billion, corporation tax was the next largest, at €24 billion, and VAT came in at about €20 billion. Those figures and the figures the Minister has just outlined show that there is a significant exposure for this country. Because of the potential changes with the US Administration, we could be looking at significant job losses, significant corporation tax losses and a significant fall in income taxes in this country, as well as austerity being brought into place because of the lack of taxation within the budgets to be able to pay for the services that have been built up over recent decades. What actions is the Minister taking with the US Administration to make sure that those tax bases do not evaporate over the next while?
The Deputy has been against every attempt to broaden the tax base. He is against all our attempts to do that. He is against carbon tax. He is against local property tax. I ask him not to stand up here and point out to me the dangers of a narrow tax base when he is against any efforts to widen it. He has been against our running budget surpluses, which are in place to deal with the very kinds of risks that could materialise. While we have increased public expenditure in recent years to respond to the many challenges we have faced and the many needs within our society, we, and I in particular, have also made the case for running budget surpluses to give us the flexibility for what the future could bring. The Deputy has been against doing that. I ask him not to stand up here now, newly aware of the risks in the world economy, and point out to me what we should have done in the past when he has been against doing it.
We will engage with the US as members of the European Union in our meeting of finance ministers in Brussels on Monday and Tuesday, when we will consider this issue further.
Foreign direct investment, FDI, is considered a transitional economic policy. It is usually developed from a non-developed economy to try to get into a developed system. When that economy has developed to a good stage, most economies then try to develop indigenous economy because it is usually much stickier and less mobile as regards threats internationally. Obviously, they use strong indigenous economy and a decent FDI input. This country has never moved on from FDI in terms of its economic policy and, therefore, has left itself significantly exposed.
The Minister's Government continues to do that by not ensuring we have a strong indigenous economy. I have argued in this Chamber and committees for years that Fine Gael should want to collect more corporation tax instead of the bargain basement corporation taxes the Minister's party stood for for a long time. What actions is the Government taking now and is it going to completely outsource its actions to the European Union-----
I thank the Deputy and call the Minister to conclude.
-----given Ireland is the most exposed country in Europe?
We got a real insight into the thinking of Deputy Tóibín and Aontú there. He characterised foreign direct investment as transitional investment in jobs. Is he going to tell the people who work for the semiconductor sector here that their jobs are transitional?
They are transitional because the Government has made them transitional.
When he leaves Leinster House later, is he going to go down to the docks on the north side and the south side-----
That is not what I am saying and the Minister knows that.
It is what he is saying.
It is not. The Minister is being facetious now.
A moment ago he described that investment as transitional investment. I invite him to visit our life science sector, which is located across the length and breadth of Ireland-----
The Government has made us dependent upon it-----
-----to go down to the financial services sector------
-----by not progressing it to the next stage and developing it.
-----to go into the manufacturing jobs-----
That is the point I am trying to make-----
-----that are located in his constituency and near it.
-----and the Minister knows that.
He should walk into those workplaces and tell those people that their jobs are transitional.
The Minister is being incredibly cynical.
We got an insight into the thinking of Aontú there. The Deputy went on to say we are outsourcing our sovereignty. That is the thinking of the 1950s and 1960s. It is not the thinking that has enabled this country to grow its prosperity. It is not the approach that will help us navigate our way through the challenges that are there.
5. Deputy Pearse Doherty asked the Minister for Finance to outline the implications for Ireland of the recent decision by the new US Administration to withdraw from the OECD Global Tax Deal, making specific reference to both pillars of the agreement; and if he will make a statement on the matter. [5419/25]
This question is on the OECD pillar 2. Obviously, for those of us who support the OECD process and the outcomes of that the decision by the American Administration to withdraw from it has caused serious questions about the implementation not only of pillar 1, which was stalled, but also the practicality of pillar 2. As this is transposed into domestic legislation it includes the provision of the undertaxed profits rule, UTPR, which could potentially see this State applying top-up tax to American companies. It was really never the intention for a major economic powerhouse to not be part of this, so I am asking where we need to go with this and what are the early considerations from the Department.
I thank the Deputy for his question on this very important topic. At least he has a recognition of the value of organisations like the OECD. As to where we are, as the Deputy outlined Ireland signed up to a global tax deal. We did so in October 2021, as he is aware. That was part of an overall inclusive framework on base erosion and profit shifting as part of the G20 and OECD agreement. Ireland signed up to this as a pragmatic and sensible approach to address global uncertainty and provide the positive conditions and long term certainty for businesses and investors to prosper and grow.
Pillar 1 is a package comprised of amount A, which will see an allocation of taxing rights to market jurisdictions, and amount B, which will see a simplification of transfer pricing rules. Technical work on pillar 1 is well advanced, but there are a number of outstanding issues on amount B that have led to the emergence of a political impasse on the package as a whole. The implementation of pillar 2 of the agreement is more advanced. That refers to the minimum effective tax rate, which the Deputy is aware of. We have implemented this along with major economies such as Japan, the UK, South Korea, Canada and Australia and many of the other economies within the European Union through the minimum effective tax directive.
I note the decision of the US Administration in relation to the OECD agreement and the presidential memorandum issued on 20 January. This is of course a regrettable decision, but opportunities exist to engage with the new administration to explore a path forward. The Deputy asked how we will do that. The best framework for doing that continues to be inside the OECD. I very much hope President Trump's Administration can see the benefits of an organisation like that which contains so many developed economies across the world. The second, very brief, point is we should continue to strengthen our participation in the OECD through the work of the European Union. These are the kind of issues we will be discussing in Brussels on Tuesday in particular.
I thank the Minister. I am going to park pillar 1 because it never came into effect anyway and we have not transposed it into legislation. If we look at it from a financial point of view it was not in our interests and if we look at it from a global point of view it was good to have an agreement internationally.
Pillar 2 is a serious problem for us because it is now in our domestic law and companies are preparing for the 15% minimum effective tax rate, which I completely and utterly support. Those companies are probably asking whether that tax rate is going to apply and can this deal go ahead without American involvement. I agree with the Minister’s point we need to try to bring America back into the fold and discuss this, but my question is whether he or the Department are looking at that legislation and how it would apply if America stays with its current position. Our legislation means this State will potentially have to collect taxes from American companies that never operated here and never employed anybody here just because they have a subsidiary here. That is a serious problem for this deal. The interest is to get the Americans back in to discuss and negotiate this but if that does not happen what preparations are we making and what is the timeframe we need to deal with?
Our intent very much is to engage with the United States with a view to making the case to it for continued participation in the OECD framework. That is the outcome we will seek to achieve. I fully acknowledge the difficulties that will be there with regard to that given what President Trump and the Department of the Treasury have already indicated. Are we looking at what the consequences of other outcomes could be? We are considering that, but I must be frank with the Deputy that it is very early days in terms of trying to be clear what the United States may well do. Given we are going to be involved in a very important engagement with it, it is important for me to emphasise the value of the US being in this framework. The Deputy is correct that because this is an agreement that is implemented on a per-jurisdiction basis and we have a commitment that is now in our law to implement the 15% rate that will of course have consequences for companies that are inside the framework and indeed for competitiveness as well. I will update the Dáil and answer questions from Members on this issue as it unfolds, but given the uncertainty about it that is the strongest message I can deliver at the moment.
I thank the Minister. I agree it is early days and we will have to see. President Trump has made statements that seem to be a negotiation stance, so we definitely need to have those engagements at a European level and a domestic level to see how this will play out. Obviously pillar 1 and pillar 2 had a net reduction in our corporation tax. The implementation of those reduced the corporation tax the State would bring in and therefore the non-application of it would have the reverse effect, but there could be other consequences.
The United States Administration has also threatened to use section 891, which allows for the executive authority to deal with discriminatory extraterritorial taxes if it believes a jurisdiction is impacting on American multinationals moreso than anywhere else. Given the dependence on American multinationals here and the number of them that will be paying the 15% tax rate compared with others, is there any concern about this measure being used against Ireland? What engagement have we had with the US Administration up to now at a domestic level, as opposed to+ a European level, which is also important?
Any engagement with the new US Administration has been constrained by the fact that it is only making appointments at the moment. That has been the key issue. The new Secretary of the Treasury had his appointment ratified a number of weeks ago.
Many of the other officeholders within the US Treasury, however, with whom both we and Europe will deal, are in the very early days of coming into office. I expect there will be engagement between ourselves and the US in the weeks and months ahead. There will of course be engagement at an EU-US level, in which we will be involved. The Deputy asked whether there would be consequences for us if America were to take certain actions as a result of the implementation of this agreement. The answer to that question is "Yes." Overall, if America continues to see the merit - and I believe it will - in the value of strong exports on its economy in a stable tax environment in the world, I will make the case to it that it is also in its interest. In the early days of this process, making the case for the OECD and for a stable tax framework is an essential message for governments like ours to deliver.
Gabhaim buíochas leis an Aire. Bogfaidh muid ar aghaidh anois go dtí Ceisteanna Eile.
