Paschal Donohoe
Dublin Central · Ireland
“I raise the importance of our economy and funding of public services, and a particularly vital public service referenced in the programme for Government. I do so from the seat in Dáil Éireann that I first pursued and held in 2011.”
“I am proud of the investment we have made through our local authorities in recent years in the funding, and opening, of new libraries. They are cradles of decency. They are beacons of light in a world in which things are changing so much.”
“I thank my own team, who have worked so closely with me over so many years to allow me to do my work as a Minister and a representative of Dublin Central. I acknowledge that this is a complex and tough week for them, and I thank them for all they have done for me to allow me to do the work I have been trusted and privileged to do.”
“I thank the Leas-Cheann Comhairle for his support in the many committees I have appeared in front of that he has chaired and the relentless but always fair way in which he has discharged his duties. I wish everybody in this Dáil happiness, health and success in representing their constituents.”
“31 of 1999), which provides for a stamp duty to be levied on health insurance contracts that are entered into or renewed between authorised insurers and their customers in each quarter, be amended in the manner and to the extent specified in the Act giving effect to this Resolution. 19.”
“39 of 1997), which provides for tax exemptions for a unit trust which neither is, nor is deemed to be, an authorised unit trust scheme, be amended in the manner and to the extent specified in the Act giving effect to this Resolution. 7. THAT section 291A of the Taxes Consolidation Act 1997 (No.”
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Every one of 741 lines we hold for Paschal Donohoe, in date order, each linked to its source. Free to read, in full, without an account. Page 4 of 15.
“In relation to the substantive issue that Deputy Doherty raised on the cost of living, let me open by acknowledging the challenge that it is for many, and I absolutely accept that. For households and businesses, we have seen changes happen over the last number of years with the cost of living. We are seeing indications that the rate of price increases has considerably slowed down. However, that is not across our entire economy and we see some parts of the economy where the rate of price increase continues to be considerable. I also know that the point that the rate of price increase is slowing down can be of cold comfort to those who have seen prices go up by so much over the last number of years.”
“They deserve the protection of international law and they deserve safety. I have not seen the wording of the motion, or maybe Deputy Doherty is still developing it at the moment. Therefore, I am not in a position to be able to give a commitment to him now. However, I am in a position to assure the Deputy that when he makes the point that this is a serious issue, we agree, and the Government is treating it as such. All deserve the respect of international law. There are citizens from many countries, including some public representatives, who are trying to play their part in offering direct support to the people of Gaza. That deserves to be recognised in the protection that they get. I am sure Deputy Doherty will engage with the Ceann Comhairle on the motion and I know the Government will too.”
“In the spirit of Deputy Doherty having raised an important issue on a point of order, I will respond to what he has said and will then take time to respond to his additional question. I agree with him that what is happening with regard to the flotilla is a very serious matter. The Taoiseach and Tánaiste are currently in New York, concluding their work at the United Nations annual assembly. They have raised that matter within the European Union and with other Heads of Government. I have been informed that the Tánaiste has raised this specific matter with the High Representative for Foreign Affairs and Security Policy, Vice-President Kallas, given the urgency of what is now taking place. We are well aware of the safety risk that is posed to all in the flotilla. I understand there are a number of Oireachtas Members involved in this as well.”
“I believe they are still inside the OECD agreement and pillar 2 and those countries are participating in the OECD reaction to all this and making clear they are committed to the OECD process. Therefore, the answer to the Deputy’s question is that, yes, I believe they are still in it. I have not spoken to EU finance ministers on this particular tax issue in the last number of weeks but it was discussed at the Economic and Financial Affairs Council, ECOFIN breakfast that took place a week ago. At that meeting, most of the finance ministers whose countries were affected by this decision did contribute and in those contributions they made clear they were committed to the OECD framework. However, a lot of issues have now been raised by this for Ireland and Europe.”
“I do not expect pillar 1 to conclude soon given all the difficulties with regard to pillar 2 at the moment. On whether this would automatically lead to a change in the EU directive, I do not believe it will. As I said in response to Deputy Nash earlier, we are considering what this will mean for the implementation of the EU directive and what that means for Ireland’s competitiveness and for Europe’s competitiveness if Ireland and Europe stay inside the second pillar of the OECD agreement while America is co-existing with it but is not in it. I am considering all of this at the moment with my officials. If it requires any change to the finance Bill, we will certainly do that, but at this stage I cannot give the Deputy a definitive answer.”
“I provided some information on this in my answer to Deputy Nash earlier, so I will just reiterate some of the key points. It will take some time to understand the consequences of this understanding that has been reached between a number of countries and America. The key issue I am concerned about is how this is consistent with the operation of the OECD agreement and the particular issues within that broad framework for me are, first, what this means for the competitiveness of countries and companies that are still inside pillar 2; second, how this side-by-side arrangement will actually happen; and third, how it will be implemented. Engagements in the OECD with regard to this are ongoing. A G20 meeting taking place at the moment may begin to allow us and other countries to understand these issues better.”
“It is important that I do not play a role. This is an organisation that is responsible for €16.6 billion of our money. In order for that money to be looked after and managed in a way that is safe, it is very important that a Government does not play a role in directing it on individual transactions it makes.”
“Again, I condemn what is happening to the people of Gaza and the awful violence and trauma that is being inflicted on them. However, the Deputy referred to the importance of international law. I also have to adhere to domestic law and under domestic law, ISIF is independent of me. I can give it guidance, and strong guidance, in relation to its overall strategy, for which I have a statutory role, but I do not play a role in individual decisions it makes with regard to shares or bonds.”
“I have shared this information with the Dáil on a number of occasions since I was reappointed as Minister for Finance. I am absolutely aware of all the awful humanitarian catastrophe that is unfolding on the people of Gaza and the House is aware of the very strong diplomatic action that this State is taking with regard to it. On this particular issue, as I said, ISIF has divested from a number of companies that are active in that area. It is independent of me. I do not play a role in directing it with regard to individual transactions it makes. I know that the board of ISIF and the NTMA will be well aware of all the issues that are associated with some of these investments, which is why they have exited from a number of them.”
“The six companies were Bank Hapoalim, Bank Leumi Le-Israel BM, Israel Discount Bank Limited, Mizrahi-Tefahot Bank Limited, First International Bank of Israel Limited and Rami Levi Chain Stores Limited. At that time, ISIF determined that the risk of these investments was no longer appropriate. Given the scale of the portfolio ISIF manages and how much of our money it is responsible for, it is important to recognise the independence of the NTMA board and the decisions it makes. Divestments have already taken place, and ISIF will determine the correct investments in a way that is consistent with its independence and mandate.”
“The Ireland Strategic Investment Fund is a €16.6 billion fund comprising a discretionary portfolio of €8.9 billion and a directed portfolio of €7.7 billion based on its annual report. It has complete independence in implementing its investment strategy under the NTMA Acts under an investment committee reporting to the NTMA's board. At the end of 2024, ISIF held, both directly and indirectly, €7.76 million in six companies listed on the UN database, which is 0.16% of its global portfolio. Direct investments by the Ireland Strategic Investment Fund in companies on the UN database were approximately €5.6 million in four companies, and indirect investments were €2.16 million and included five companies. ISIF divested from six companies in 2024, with a total value of approximately €2.95 million across that year.”
“The figures I shared with the Deputy earlier show overall that this rent tax credit is being reasonably broadly used. I remember when the tax credit was brought in that in the early period in which it was being made available, I was concerned that the drawdown and use of it was not as broad as I would have hoped. Towards the end of the tax year, however, we saw more taxpayers who were eligible for it register. As regards the communication and drawing attention to it, the advertising the State does directly and then the advice that individual taxpayers can receive are where it becomes so valuable. This is a rent tax credit that can play a valuable role in helping taxpayers deal with the high cost of rent. As I said, we will consider that and other tax credits as part of the preparation for budget 2026.”
“I am not suggesting that any one measure on its own might be something we might not be able to sustain into the future, but all of them put together is where the risk arises.”
“I am very much aware of the value and role that this rent tax credit plays in helping with the cost of living. That is why over a number of budgets I, along with the Minister, Deputy Chambers, and the former Minister, Michael McGrath, have made changes to the value of it. The decisions that will be made on budget day are being carefully considered at the moment. As I said to the Deputy earlier in response to his earlier question, it would not be appropriate for me to indicate now what we plan to do. We have to be very careful because we are making these decisions against the backdrop of an economic environment that is very uncertain. We have to ensure that any decisions we make are ones we will be able to afford in the years to come.”
“The extent to which a claimant benefits from a tax credit, through a reduced liability or receipt of a refund for overpayment of a tax liability, is determined by their gross tax liability and use of other tax credits and reliefs. Taxpayers who claim the rent tax credit may not benefit from this credit as a result of other reliefs, deductions and tax credits already reducing their net tax liability to nil. To 1 July of this year, the number of claims made by taxpayer units in respect of the rent tax credit are as follows: 307,270 for 2023, 289,700 for 2024 and 73,600 for 2025.”
“The rent tax credit was introduced by the Finance Act 2022 and may be claimed in respect of qualifying rent paid in 2022 and subsequent years to the end of 2025. The value of the credit was €500 for a single person and €1,000 for a jointly assessed couple. For 2024 and 2025, the value of the credit increased to €1,000 for a single person and €2,000 for a jointly assessed couple. The rent tax credit has played a valuable role in providing financial support to renters right across the country. I am informed by Revenue that 313,980 taxpayers, both PAYE and self-assessed taxpayers, claimed the rent tax credit for 2022. Of these, 273,160 taxpayer units benefited from the rent tax credit in that year.”
“I have responsibility for setting the general direction that is given to ISIF. However, I do not play a role in determining the individual bonds and shares that ISIF holds. All the Deputies know that. I do not play a role. I do not direct or communicate to ISIF and tell it what individual investment decisions to make. What I do is communicate with ISIF and set a general direction for it.”
“As I said, I do not play a role in determining the investment decisions that ISIF makes. They are made independent of me and this decision was made by ISIF in the way I have just explained to the Deputy.”
“The Deputy is completely wrong. He said he would have been happy for us to keep shares in our banks when he is aware of the long-term risk of the relationship between the financial health of the State and our banking system becoming too close. He understands that as well as I do. Why would we want the financial health of our country to be some way influenced all over again by the movement upwards and downwards of a share price within our banking system? We got good value for the taxpayer in relation to all of this.”
“He knows the money we have gained back from the share transactions that have been made. I am at a loss as to why we would want to retain a deep ownership between ourselves and our banking system, given all the difficulties that caused in the past.”
“Well, look, the Deputy referred to simple maths. I would refer to a simple understanding of stock markets. I know Deputy Doherty is a little hazy and unclear on the issue of how companies are owned. In regard to AIB, if we were in a position where the financial markets were expecting that the State was not going to reduce its shareholding in AIB over time, of course that would materially affect the value of the shares. The Deputy cannot simply say - he knows this - that if we were still the majority shareholder in AIB, we would be able to sell the shares at a different price. The fact that we were willing to sell the shares in the first place influenced what the price would have been when they were sold. I fundamentally do not accept the argument Deputy Doherty is making.”
“The factual position is that AIB paid ordinary dividends of €166 million, then €696 million and then €861 million in respect of the fiscal years 2022 to 2024. The total yield to the State from those dividends was €463 million. In conjunction with the payment of ordinary dividends, AIB completed directed share buyback programmes from the State. The total yield to the State from these directed buybacks was €2.9 billion. Regarding the 2024 figure, a €500 million directed buyback was completed during the following half-year results and a further €1.2 billion following the full-year results. To reiterate, I cannot speculate on what the board of AIB would have done as regards capital distributions over the period to which the Deputy refers, as the State's shareholding would have remained unchanged.”
“The long-standing policy of this Government is to return the remaining banks to private ownership while achieving value for the taxpayer. It continues to be the Government's belief that banking in the main is an activity that should be provided by the private sector and that taxpayer funds which were used to rescue the banks should be recovered and used for more productive purposes. The distribution of capital is the responsibility of the board and management of the bank. To assess this hypothetical scenario, I would need to speculate on both the level of dividends and indeed the mix of capital distribution via cash dividends or buybacks that the bank might have declared in a scenario where the State did not reduce its shareholding between 2022 and 2024.”
“Of course, I am happy to give the exact dates to the Deputy. I will ascertain them and come back to him on it. This decision was made by ISIF. The government bonds are no longer held by it. I am happy to come back to the Deputies with the dates they are looking for as to when the decision was made and regarding what Deputy Ó Murchú has said there. Of course I am fully aware of the debate that is there in relation to the role of the Central Bank and the role it plays on the prospectus evaluation, particularly given the debates we have had in this House on the issue. I emphasise again that it has a very narrow set of legal responsibilities to which is has to adhere. It is. It is aware, as am I, of all of the debates around the issue. It has a very small specific role. That is all it discharges.”
“In relation to the different questions, I was aware of the shareholding that ISIF had, indirectly in the Israeli bonds as part of the preparation for the publication of its annual report. I was not aware up to that point. The bonds have now been sold. I have outlined on other occasions, just a few moments ago, the engagement between my own officials and the Central Bank. In terms of the role that we play from a prospectus point of view, the Central Bank plays a very narrow and specific role in relation to the prospectuses and to their evaluation. It has to act in a way that is consistent with its legal obligations, and it does. I and the Governor of the Central Bank are well aware of all the debate around this matter. However, it is acting in a way that is consistent with the obligations it has on a very narrow and specific function.”
“In addition, the Attorney General wrote to me providing preliminary advice on the proposed Bill. My officials would also have liaised with officials from the Central Bank of Ireland in preparing for the debate in the House on the recent Private Members' Bill and motion brought by Opposition parties, on the prospectus approval process. Finally, on 11 July, the Minister of State, Deputy Troy, met with the Palestinian ambassador to Ireland.”
“As such, the Department of Finance does not have a role in approving any prospectus documents for issuers of bonds. With regard to issues that have arisen on this topic such as parliamentary questions, Dáil debates, Private Members' Bills or motions, my officials to date have had regular engagement with officials from the Central Bank of Ireland and liaised with the Department of Foreign Affairs and Trade, as that Department is the lead Department of government on overseas matters and any proposed restrictive measures against another State. As I referenced during the Second Stage debate on the recent Private Members' Bill, the Restrictive Financial Measures (State of Israel) Bill 2025, my officials have engaged with the Attorney General’s office.”
“The approval of a prospectus document is a matter for the Central Bank of Ireland as the designated competent authority under the EU prospectus regulation. It is an operational matter for the Central Bank as the State’s financial regulator to ensure that a disclosure document for any offer of securities for sale to the public contains all the necessary information required by the EU prospectus regulation. Under that regulation, a prospectus must be drawn up, approved and published when securities are to be offered to the public and-or admitted to trading on a regulated market in the EU. It is important to be absolutely clear that the Israeli bonds themselves are not sold by the Central Bank, nor are they listed for sale on the Irish Stock Exchange.”
“I cannot comment on decisions that will be announced on budget day. Deputy Brennan raised the particular issue of the 5% rate for the apartment sector. I have been advised by my officials in this area that if any attempt were to be made to move apartments down to 5%, other goods that are sold at the middle VAT rate would need to be moved down to 5% as well. That would have a particular effect on decisions we make with regard to food, accommodation and hospitality. I am advised that we cannot make a decision on a 5% rate for an apartment dwelling in isolation of the fact that we would need to move other parts of our economy down to the same rate with an extremely significant cost behind that. As I said, any such decisions will be considered carefully and announced in early October.”
“On overall tax receipts for the year, particularly when it comes to VAT, the advice I have received is that we expect to collect the VAT we indicated we would collect for the year. Currently, we are in line to deliver that target. I am aware of the role VAT can play in helping with the cost pressures businesses are facing. The programme for Government contains a clear commitment in relation to VAT for the food sector and gas and electricity. The decision in relation to VAT for gas and electricity has now been made to extend that up to budget day.”
“The Exchequer returns for the first half of the year were published at the beginning of the month and the Deputy has just touched on them. VAT receipts amounted to €11.6 billion, which is an increase of €600 million and is just under 6% higher than in the first half of last year. The growth in VAT is consistent with the increase in consumer spending. On an annual basis, nominal spending was up by 4.7% in the first quarter of the year, the latest for which data is available. High-frequency indicators such as card payment data suggest that positive momentum has continued into the second quarter, which is also consistent with the VAT data I shared with the Deputy.”
“On the second matter, I am happy to raise it with the Minister for local government, Deputy Browne, and his colleague, the Minister of State, Deputy Cummins, who is also involved in this issue with me. On the first matter, I examined that issue and inquired into it. I was definitively told I could not make that change. The reason is the budget cycle is annual and the budget cycle here is also annual. When I referred to the annual budget cycle in the first part of my answer, I spoke about the budget cycle within the local authority. For that reason, I was told, the decision in relation to the base rate has to be taken each year when budget decisions are made. I pressed that issue because I am aware of the challenges there can be around making that decision.”
“I understand the Deputy's point. In between the two complex formulae and the spreadsheet I see, which has them on it - I am sure the Deputy is familiar with it - there are a number of local authorities like his own that believe they do not get to keep all of which they raise. The issue, which the Deputy acknowledges in his question, is that if we were to move to a system where all of what a county raises is kept within the local authority raising it, some local authorities would need additional support and intervention directly from the Exchequer to ensure funding they did not lose the funding they had. That would carry a consequence because it would mean funding that we are currently using in local government would have to be moved into that use.”
“I thank the Deputy. The answer I have to hand goes through the structure of the local property tax, which Deputy Timmins already knows. I will not take him through that. The issue to which he referred is about the interplay between the amount of revenue a local authority raises in its own jurisdiction and the equalisation fund. I have tried in the various revaluations in which I have been involved - I have now done two - to get to a place where local authorities control and keep more of the revenue they raise. I know there are still policy issues in this regard and areas in which we can improve. I am sure the Deputy will give me his view on those now.”
“We are talking about the Revenue Commissioners here, an authority that has implemented the customs code in this country for many decades, and about an airport that has been very active and very busy throughout its existence. I have explained to the Deputy really clearly the circumstances in which customs inspection is due. The subsections to which he refers do not take the place of the reality I have outlined, which is that goods have to be unloaded in particular circumstances and have to arrive into the EU in a particular way for them to be subjected to the customs code. That does not happen in Shannon Airport with regard to military aircraft and for that reason, our customs code plays no role in the issue to which the Deputy is referring.”
“They are completely different questions. The Deputy asked me whether our customs code is being implemented at Shannon Airport. The unambiguous answer to that question is "Yes". The implementation of that code does not require us to play a checking role on those aircraft.”
“However, goods brought into the EU which are unloaded and reloaded onto the same means of transport during its voyage, in order to enable the unloading or loading of other goods, are not required to be presented to customs. In circumstances where military aircraft originating from outside the EU are stopping over at Shannon Airport and no goods are unloaded, other than to allow for other goods to be loaded, there is no entry into the European Union. As such, there is no requirement for customs inspections or customs declarations. Similarly, there is no customs duty or VAT due.”
“I am advised by Revenue that it is responsible for implementing customs controls on traffic entering the European Union through Irish ports and airports. This includes customs clearance of goods, the collection of customs duty and associated VAT and the detection, interception and seizure of prohibited and restricted products at points of entry into the State. The Union customs code is the legislation governing customs procedures across the EU, to which Ireland is fully committed. Article 139(2) of the code, which deals with the presentation of goods to customs authorities, provides that goods brought into the EU by sea or air, which remain on board the same means of transport for carriage, must be presented to customs only at the port or airport where they are unloaded or transhipped.”
“The Deputy asked me about those affected. I can give him the information that is available to me this evening, which is that the interest rate for 92% of mortgages held by lending non-banks is 5% or lower. The interest rate for 68% of mortgages held by non-lending non-banks is 5% or lower. While only 68% of mortgages are at 5% or lower, this is an improvement from where we were at the end of 2023. The consumer protection code applies to those affected.”
“Again, the Deputy uses the language of obstructionism. I exercised my right in the Dáil. The Deputy has the same right. That is not obstructionism; that is me having to weigh up what I believe the right decision for our economy is overall and the fact that we need banks to be in a position to lend more in the future and invest more within our economy. That is not because I am making the case for a bank or picking the side of a bank-----”
“First, the Deputy referred to me being "a cheerleader". What I said at the time was that the sale of those loan books from those various banks was an important step in the banks regaining financial health, which, in turn, would help them to lend more in the future and contribute to our economy growing. I understood at that point the sensitivity with regard to it. That is why the consumer protection code applies to those whose loans have been sold. The Deputy said that I obstructed legislation. I voted against his legislation, just as he regularly votes against Government legislation, because I did not believe that it would be productive or play a role in dealing with these issues. At the time, I outlined other issues I had with this legislation. The Deputy asked me about how people are affected in different ways.”
“At the end of March the average interest rate on outstanding mortgages held by banks was 3.5%, down from 3.67% a year earlier. For the non-bank sector, the average was 4%, down more than half a percentage point from 4.51% a year earlier. For entities in the non-bank sector that do not engage in new lending, the average was 4.57%, down almost a full percentage point from 5.5% a year earlier. These reductions are welcome, and it is expected all mortgage creditors will continue to keep their lending rates under review. It is my clear view that where mortgage rates have in the past increased in line with ECB increases, they should now, in this new interest rate environment, also appropriately adjust downwards. The Central Bank will continue to monitor the level and distribution of interest rates in the mortgage market.”
“The European Central Bank increased interest rates over the course of 2022 and 2023 as a move to combat excessive inflation. Since the middle of 2024, the ECB has reduced its main official lending rate to 2.15%. While changes by the ECB generally have a direct impact on tracker mortgage rates, reductions by the ECB are only one factor that feed into the commercial decisions made by creditors in relation to other lending rates. Other factors can include the cost of funds, risk levels, contractual terms, creditor status and market competition. As a result, mortgage interest rates can vary between creditors and customers. I appreciate this is a very difficult and sensitive matter for those who have been affected by it and have seen their loan books sold. It is important to indicate to the changes on average there have been on interest rates.”
“As I do that I will of course answer the Deputy's questions and those of the Joint Committee on Finance, Public Expenditure, Public Service Reform and Digitalisation, and Taoiseach on what I accept is a very important policy matter.”
“It is possible it could require action at EU level but I cannot give the Deputy a definitive answer to that yet. The reason for that is that what I have seen is the publication of a general agreement on how the US would engage in the OECD framework that raises many questions. At this point in time, I cannot give the Deputy a definitive answer regarding how that agreement will be executed and whether the change would be needed. I believe, just as we entered into the OECD agreement after very careful consideration and taking time to work our way through it, we should also take time to fully understand this agreement and what the consequences of it will be, in conjunction with other stakeholders and partners.”
“I hope given the G20 discussions that are under way this week and what will happen in the OECD, I will be at a point of being able to give a fuller answer to those questions over time.”
“The short answer to the Deputy’s question is that this agreement does have consequences for the OECD agreement overall. There are three in particular. The first is what this means for competitiveness of economies and countries that remain fully inside pillar two. The second is how other economies and important stakeholders in the OECD agreement will respond, given the actions that have been taken by the US, and the third issue is how a side-by-side framework will be implemented technically given that so many of these companies, which are large investors and employers in Ireland, need certainty regarding how tax law is executed. Those are three important issues we have to carefully consider.”
“As part of the G7 understanding, the US also agrees to withdraw section 899 retaliatory measures from the USA reconciliation Bill. These measures threaten tax increases against residents of countries that implement the pillar two rules. It is important to note that the statement represents only the views of these countries and does not put forward any proposals on how a side-by-side system would operate. This approach requires very careful consideration and it remains too early to establish what the implications might be in relation to our tax base or the exchequer. Discussions are progressing on a broader OECD inclusive framework, with a view to a potential agreement over the coming months. We remain engaged in that process.”
“I thank the Deputy. He is making reference to a G7 statement published on 28 June, adopting a common position on a path forward for the OECD agreement. In that statement, the G7 proposed the side-by-side application of the OECD pillar two system, and the US minimum tax rules, which are now under consideration by the OECD inclusive framework. Since January, the US Administration has set out various concerns regarding aspects of the pillar two rules and has proposed a side-by-side solution under which US-parented groups would be exempt from many aspects of the pillar two rules, in recognition of the existing US minimum-tax rules which such groups are subject to. The G7 statement builds on this approach through the agreement of a common approach among G7 countries around a possible path forward.”
“I will make three points on this. First, ISIF no longer holds these bonds. It divested of them. Second, as the Deputy well knows, ISIF independently decides what shares it is going to hold and what investments it is going to make. It does so in a way that is completely independent of me. Third, I thoroughly refute any suggestion of complicity in the appalling violence being inflicted on the people of Palestine. I wish to make clear my condemnation of what is happening-----”