Business Technology

Friday 20 September 2019

Paschal Donohoe 'not shying away' from report into digital tax

Paschal Donohoe. Photo: Collins Dublin, Gareth Chaney
Paschal Donohoe. Photo: Collins Dublin, Gareth Chaney
Ellie Donnelly

Ellie Donnelly

Minister for Finance Paschal Donohoe has said that he is not shying away from a fresh report into digital tax.

Speaking at an Oireachtas Committee on Thursday the Minister said that the yield involved in such a tax "could be a lot lower than may be expected."

Minister Donohoe was responding to questions from Deputy Joan Burton who said that there is a need for a fresh report as there has been a huge change in digital landscape.

"I think it is a reasonable approach that we should be given a report on it. By trying to shy away from it, it will not do Ireland’s case any good," Deputy Burton said.

Minister Donohoe said that the OECD was already engaged in "intense work" in this area.

"I believe change will happen, the best way is through the OECD. Yes this is going to be a new area of change. Certain countries have already identified difficulties on this, for example Sweden with gaming taxation."

In a robust exchange between the two, Deputy Burton accused the Minister of giving a "bland, brush off answer" on the matter.

However the Minister refuted this saying that he was "not shying away from anything."

He added that also of concern are the many principles involved in developing such a tax.

"The principle of a group of countries going down this path while we don’t have agreement with other partners on how it is implemented, these trading partners could made decisions regarding trade that could have very serious consequences for EU and Ireland, and Ireland needs to be very clear on best route."

"Other small service economies are now saying the same thing as Ireland."

He added that if there were any matters that committee wanted regarding the negotiations he would will supply them promptly.

Deputy Burton said that the Minster’s statement was "deeply regrettable."

"The fact that he is unwilling to put an updated report before the Irish people is deeply regrettable," she said.

Earlier this week it was reported that French-led plans to tax big internet firms like Google and Facebook on their turnover are on the verge of collapse after other member states rejected them and announced national initiatives instead.

That's a boost for Ireland which has opposed the plan, amid fears from Revenue that it could cost the Exchequer as much as €160m a year.

Under the proposal, a 3pc levy would be put in place on digital revenues of large tech firms.

They would be able to write it off against corporation tax - which could hurt Ireland as many of the companies are based here.

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