It is estimated that if this levy at an extremely low rate, about 0.1%, was applied to trading in shares, securities and derivatives, Ireland would raise in the region of €320-€350 million per annum. This is money that could be put into services such as health, housing, community, education and in my opinion is a small price for the financial institutions to pay, particularly when the tax payer, who bailed them out suffered so much with austerity budgets. If we had a strong Government who stood up for people and not big business, then they would see this tax as a no brainer.
This issue is much more then the simply applying of the financial transaction tax or the apple debate which came up last month. This issue centres on who do the Government actually serve? Is it the people struggling to survive or the multinational financial superpowers who are driven solely by profit. It is clear that this Government favours the latter.
This week I had the opportunity to put a question to the Minister for Finance regarding the recent commitment to the highest international standards in tax transparency and asked if he is considering introducing a financial transaction tax:
QUESTION NO: 16
DÁIL QUESTION addressed to the Minister for Finance (Deputy Michael Noonan)
by Deputy Maureen O’Sullivan
for ORAL ANSWER on 29/09/2016
To ask the Minister for Finance his plans to reform the Corporate Tax structure; and if he will consider introducing a financial transaction tax following the recent agreement on a commitment to the highest international standards in transparency in taxation of the corporate sector.
On 2 September 2016, the Government decided that a motion would be put forward to the Dáil to support an appeal in the Apple State Aid case. At that time the Government also decided as follows:
to commit to the highest international standards in transparency in the taxation of the corporate sector;
to affirm its commitment to the 12.5% corporation tax rate; the Research and Development credit and Knowledge Development Box; and
to commit to arrange for a review of Ireland’s corporation tax code by an independent expert; the review will exclude any possibility of a change to the 12.5% corporation tax rate.
I am currently in the process of drawing up the terms of reference for the review. I expect that the terms of reference will be announced at Budget time.
It is good practice to undertake periodic reviews of key areas of Government policy. The last review of corporation tax policy took place in 2014. Since then a wide range of new international developments have emerged in international taxation, such as BEPS. We need to ensure that Ireland’s corporation tax code meets these new standards while remaining competitive as the economy continues to grow.
Ireland continues to take an active role in global work to reform the international corporate tax system and will engage constructively with any measures to work towards international tax reform.
In relation to the financial transactions tax, on 17th June 2016 the ECOFIN Council discussed the current state of play with regard to the proposal of a number of Member States to introduce a financial transaction tax. In the context of this discussion, ten of the original eleven Member States (Estonia has indicated that it no longer supports the proposal), issued a statement setting out their agreement on the core design principles of an FTT. The statement indicates that further reassurances were needed on two issues in particular, for which two task forces will be immediately set up. First, taxation of derivatives should not have a negative impact on public borrowing costs. Second, tax collection should be cost-effective. The outcome of these two task forces was to be discussed in September. I understand the task forces have had some discussions but that significant differences of opinion remain.
Much uncertainty remains therefore as to the form the FTT might take and more detail would be needed on the final shape of the tax before a definitive conclusion could be reached about its impact on Irish taxation revenue.