Sir, – Your article “Protesters demonstrate against oil exploration plans” (Home News, November 26th) states Providence Resources argue that Ireland might gain up to 40 per cent of profits from production. In my view, this statement by Providence Resources is misleading.
Under the current taxation system for exploration companies, they only pay 25 per cent tax on profits. However, they can write off all expenditure for the previous 25 years before any tax is paid. Thus, the tax take to the State is much reduced. Tax rates in excess of 25 per cent only apply (on a sliding scale basis) where profits exceed certain profit ratios. – Yours, etc,