Fianna Fáil Senator Aidan Davitt has called for a debate on Ireland corporate tax rate.
"There is a need for a proper debate and discussion with the Minister for Finance on the future of the minimum global rate which, as we all know, has been quite a hot topic. For context, I am watching developments in both the US and Poland.
"In the US, the Republican Party in the House is holding up the agreement to accept the global minimum rate, which the Democratic Party therefore cannot implement despite being in power. This is certainly going to be a problem. The global rate is dead in the water if it is not implemented there. The Government of Poland has also not yet signed up to it. This resulted in the matter being dropped from the agenda of last month's ECOFIN meeting.
"The OECD has accepted that it will be at least 2024 before the rate is implemented. This is one year further along the timeline than had been proposed. I would say it will be longer because, unless there is a change in America, which is very unlikely, and in Poland, which is probably also unlikely for a while, this is not going to change.
"Ireland has very successfully used our corporate tax regime as an effective economic development tool for decades now. It is estimated that the Exchequer will lose a sum in the region of €2 billion annually, which is no small amount. The background to this is the cost-of-living crisis, surging inflation, the war in Ukraine and the plethora of other complications on the horizon.
"Just this week, the Irish Fiscal Advisory Council warned that the public finances are now too reliant on corporation tax, which is estimated to have brought in €22 billion in total since 2005. Surely we should now be carefully considering our fiscal policy and how best to support businesses, foreign investment and, ultimately, the people of this country when it comes to the redistribution of these funds at budget time," Senator Davitt, speaking in the Seanad, stated.
