Stephen McNeice
Stephen McNeice

17.47 12 Oct 2020


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It's 'exactly the right time' to reform corporation tax rules for multinationals, according to Sinn Féin's Pearse Doherty.

The Donegal TD claims Tánaiste Leo Varadkar 'didn't have a clue what he was talking about' when he rejected a Sinn Féin proposal over the weekend.

As part of their alternative budget, Sinn Féin has proposed implementing a key recommendation of the Expert Review of Corporation Tax, which was led by economist Seamus Coffey.

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It's aimed at "smoothing out" the amount of corporation tax multinationals pay over their time, rather than allowing them to delay it for a number of years when they first establish operations here.

Sinn Féin says changing the rule around capital allowances for intangible assets would mean an additional €720 million for the State next year.

Over the weekend, the Tánaiste sharply criticised the opposition party's suggestion following an interview with the Deputy Doherty in the Business Post.

However, the Donegal TD today told The Hard Shoulder that Mr Varadkar's tweet was 'embarrassing'.

He said: "Is he arguing that we allow [multinationals] to go tax free? Really he didn't have a clue what he was talking about.

"He didn't know that this was a proposal that doesn't increase tax rates... that doesn't over time increase the amount of tax that a multinational would pay. It just brings the tax forward."

He said implementing the proposal would mean more money brought in by the State in 2021.

However, he explained: "Over a longer horizon, the same amount of tax would be paid by the company, and the same amount of revenue over a longer period would be brought in by the state.

"This is exactly the right time to do it... this is money we really need as a State at this point in time."

Deputy Doherty said there's currently a risk companies could restructure their tax arrangements by the time they need to pay corporation taxes due here.

He observed: "That's why [Seamus Coffey] recommends in his report that this is about smoothing out corporation tax.

"If there was ever a time when we need to support income and jobs, and build extra capacity in the system... when we need to build social, affordable and cost-rental houses... this is the time of course that this €720 million should be brought in: this year, next year and then the next number of years."

'A lot has changed'

Also speaking on the show, Fianna Fáil MEP Barry Andrews argued this is not the time to change the rules.

He said: "The problem with it is that it simply regurgitates an idea that came up before the last general election - a lot has changed in the last eight to nine months, I think everyone can agree.

"It doesn't actually accrue anything additional to the Exchequer... it simply means it's brought forward more quickly."

Mr Andrews said the country now faces the costs of the COVID-19 pandemic, as well as the continuing risk of a hard Brexit.

He said: "[Multinationals] also create 200,000 jobs in this country, and they've allowed us to break free from our island confinement and our reliance in the UK.

"We need to balance these issues and be very careful about making these changes Pearse are suggesting."

Main image: File photo of Pearse Doherty. Picture by: Leah Farrell/Rollingnews.ie

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