Deputy Michael Colreavy, Sinn Féin spokesperson on Communications, Energy and Natural Resources, has welcomed that Minister Pat Rabbitte believes that Ireland’s offshore oil and gas terms must be changed but has said that proposed changes fall short of what is needed.
Speaking on the issue, Deputy Colreavy said:
“I welcome that Minister Rabbitte has finally recognised that there is a need to review the current tax terms applied to Ireland offshore oil and gas reserves.
“In May 2012, a report issued by the then Joint Committee on Communications, Natural Resources and Agriculture recommended a major overhaul of Ireland’s tax terms for its offshore oil and gas.
“The committee recommended that the Profit Resources Rent Tax (PRRT) for future licences be increased to 40% for small commercial discoveries, 60% for medium commercial discoveries and 80% for very large discoveries.
“The changes outlined by the minister will see the result in the maximum PRRT being increased from 40% to 55%.
“This clearly falls short of what the committee recommended and Ireland still has one of the lowest tax returns from natural resources of any state.
“The corporation tax rate applying to petroleum production will remain at 25%.
“There will be no retrospective action taken on existing oil and gas fields, including the Corrib gas field.
“Sinn Féin have maintained that a state petroleum company be established along the lines of the Norwegian model which would create a sovereign wealth fund for the Irish people.
“I welcome that the Minister recognises that changes must be made but it is clear that changes proposed fall short of what is needed.”