Irish tax rate ‘must stay low’

IRELAND must keep its low tax rates to maximise its attractiveness for foreign investors, the head of the US Chamber of Commerce said yesterday.

Thomas Donohue, whose organisation represents more than three million American businesses, said Ireland should resist efforts to impose a single corporation tax regime across Europe and fight to retain advantages that made the country distinctive and competitive.

Mr Donohue said Ireland’s attractiveness as a place for American companies to do business stemmed from its high-quality, English speaking workforce, its tax system, an attractive regulatory environment and its position as a gateway for access to EU markets.

“If you take away one or two or three of these, Ireland would lose some of the lustre as a place to go,” he said, adding he hoped Ireland would work to “protect the values that make it unique and prosperous”.

Mr Donohue said American states competed with each other to attract foreign business that had decided to invest in the US and that it was necessary for individual states to be able to differentiate themselves.

Mr Donohue was speaking at a joint meeting of the Chambers of Commerce groupings representing business in America and across Europe, in advance of the US/EU summit in Dromoland Castle this week.

Christoph Leitl, president of Eurochambres, the Europe-wide organisation representing 41 national chambers of commerce, joined Mr Donohue in calling on governments to tackle the increasing regulatory burden facing businesses.

Dr Leitl said both American and European businesses wanted more progress on removing barriers to trade. A joint survey published yesterday found businesses on both side of the Atlantic considered excessive regulations and movements in the euro/dollar exchange rate among the biggest obstacles in the way of trade. The survey also revealed a high degree of interest among companies in doing more business across the Atlantic.

Mr Donohue said his organisation had spent $40 million (€32 million) lobbying politicians to reform the American legal system, which he said had become distorted by developments such as class action suits and increased the risks faced by businesses. However, he predicted that trade between Europe and America would continue to grow from its current level of over $1 billion per day.

He said currency movements were a problem for transatlantic business but that the exchange rate was subject to the “whim” of the financial markets.

Chambers of Commerce of Ireland president Mark Staunton said Irish business should not lose sight of the importance of transatlantic trade in spite of a recent focus on eastern Europe.