‘Tax rise would damage economy’

THE Chambers of Commerce of Ireland says there should be no increase in the rate of corporation tax.

The Chambers said the call to increase the 12.5% rate by the Irish Congress of Trade Unions would damage the economy in the long run and lead to a reduction on overall tax revenues.

“The one thing that definitely should not be done is to increase corporation tax.

“Over the last 15 years the share of corporation tax to total tax revenue has increased from 4% to 16%, which is above the international norm and demonstrates that business is certainly paying its fair share,” CCI chief executive John Dunne said.

ICTU said low taxes have not been the main driver of economic gains in recent years and keeping taxes low would be detrimental to the economy. It wants corporation tax increased to 20%.

But Mr Dunne said the rate is underpinning Ireland’s prosperity in terms of foreign direct investment from multinational companies.

“They [ICTU] seem to prefer the notion that these companies come here for such things as the our state-of-the-art public transport system, the world class efficiency of our airport and air connections and the universally accessible and competitively priced electricity supply all provided by union-dominated state monopolies.”

On the issues of abolishing property tax incentives, the Chambers said it merits consideration, but it accused ICTU of being reluctant to follow this analysis to its logical conclusion by acknowledging the need for a property-based tax.