Key focus of Government is getting people back to work – Donohoe
The Minister for Finance has said that scaling up the vaccine programme is key to the re-opening of the economy and that is happening now with 170,000 vaccines planned for this week.
Paschal Donohoe said that re-openings in March and April happened and in the coming weeks and months the delivery of vaccine targets will be the foundation for re-opening the economy.
Minister Donohoe told RTE’s Claire Byrne programme that Ireland has the ability to manage its increased debt, built up as a result of Covid-19.
He said the Irish economy went into the pandemic in very good condition, but nonetheless “decisions will have to be made”.
Mr Donohoe said economic forecasts indicate that getting the country back to work will be a huge driver of tax revenue increases.
He said the Government wants to get around 70,000 people back to work this year and 200,000 next year.
This will be a key driver in closing the gap between what is spent and what is taxed, Mr Donohoe said.
The Minister said that once the pandemic reduces in Ireland, the level of expenditure that relates to Covid will be reduced and later eliminated.
He said the sole focus of the approaching budget will be about getting 225,000 people back to work.
When asked about proposals for a solidarity tax on high earners, Mr Donohoe said the best way this proposal could be advanced is through the OECD.
He said there is merit overall in the proposal as it ensures that everyone contributes to the recovery according to their needs, and will result in an enhanced level of fairness in relation to taxation.
When asked about Google’s tax position in 2019, Mr Donohoe said he is never in a position to and does not comment on any tax payers in the country.
But he pointed out that the “double Irish” tax agreement is gone, international rules in relation to moving income to zero tax regimes has changed and the tax reforms of the last US administration are having a very, very big impact on how tax is collected from big companies.
He said this means that those kind of scenarios are far more difficult to repeat.
US President Joe Biden and his administration are looking to change the way big companies are being taxed and this will have a big impact for Ireland, the Minister added.
Paschal Donohe said Ireland has a low corporate tax rate but the difference between that rate and the tax collected in Ireland is ‘very, very low.’
On the possible exit of KBC Bank Ireland from the banking market here, Mr Donohoe said that international banks can make more money in other countries and in bigger markets than Ireland and the KBC withdrawal confirms this.
He pointed out that the Irish banking system is stable and secure, but said the trade off is between the risk that the Irish economy faces and the stability of its rules.
This balance is moving in a way that he would not have liked to see happen, he said, but now it has happened we must look to the future and see what can be done to foster an enhanced competitive dynamic in Ireland.