Britain to lower its corporation tax rate

BRITAIN’S plan to cut the headline rate of corporation tax over the next five years, starting in next month’s emergency budget, could pose a threat to inward investment into Ireland if the cuts are steep enough.

The reduction has been agreed with the Liberal Democrats and has been added to the final coalition agreement.

National Irish Bank economist Ronnie O’Toole warned that the competitive advantage enjoyed by Ireland with its low 12.5% rate will be eroded over time as competition for inward investment heats up.