In a recent interview with the Financial Times, he said he would "seek expert advice" to establish by the end of the year what level of fiscal gain is achievable for the State from Ireland’s offshore oil and gas.
Last May, an Oireachtas committee recommended tax rates of up to 80% on the largest finds, in line with current practice in countries such as Norway. Under Ireland’s current terms, companies will pay 25% on profits, with an additional 'Profit Resource Rent Tax' of up to 15% on very large finds. Companies can avail of generous tax write-offs.
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The Minister's comments followed publication of a report by Providence Resources into Ireland's offshore potential which, it claims, can deliver "enormous benefits forthe Irish economy", if carefully nurtured. In a 2011 report, 'Optimising Ireland’s Oil and Gas Resources', SIPTU's Oil and Gas Review Group recommended that the fiscal and taxation regime of Ireland’s onshore and offshore resources be reviewed.
It also recommended that the high-skills employment potential of the industry should be recognised, that communities close to oil and gas finds should be consulted on their development and that the Government should invite all stake-holders, including trade unions, to participate in a forum to optimise the industry’s potential.
Financial journalist, Colm Rapple, a member of SIPTU's review group, said the review announced by the Minister must take account of the renewed attraction of the Irish offshore, given technological advances, increases in the price ofoil and the huge deposits in Ireland’s Atlantic margin. These are estimated by Minister Rabbitte's department to be in excess of €540 billion.
