The trading profits of companies in Ireland are generally taxed at the standard corporation tax rate of 12.5 %.
In response to the effects resulting from Covid-19, this government has introduced a number of interventions that have focused on supporting individuals and businesses to continue to trade, thus supporting employment and incomes. For example, as part of the July Stimulus Plan, a number of tax measures were introduced or put on a legislative basis including: liquidity supports in the form of enhanced income tax and corporation tax loss reliefs, wage subsidy support and the warehousing of certain tax liabilities.
It is acknowledged that some sectors of the economy continue to trade profitably and may even have experienced increased demand as a result of the pandemic. However, the sustained tax receipts from these sectors, including corporation tax, VAT and income taxes, are critical to maintaining Exchequer revenues. In addition, all businesses, regardless of profitability, have had to adapt to operate in accordance with public health guidelines through the physical adaptation of premises to ensure social distancing, the provision of PPE and the facilitation of remote working, thus facing additional costs.
Changing the current corporation tax rate (or imposing additional levies on corporate profits) for specified businesses would involve increased complexity and could change the attractiveness of Ireland's corporate tax offering. It is not possible to accurately predict the effect that changes to the rate would have on the behaviour and decisions of multinational or domestic companies. While it is possible that imposing such a levy could lead to theoretical gains, it could also potentially lead to lower levels of economic activity and/or to companies passing the additional tax burden onto their staff, customers, suppliers and/or investors. Taking all these factors into account, I do not feel an additional levy of the nature proposed by the Deputy would be appropriate at this time.