O’Keeffe: Corporation tax rate will not change

IRELAND’S low corporation tax will not change in the upcoming budget, according to Enterprise Minister Batt O’Keefe.

He said that the foreign direct investment (FDI) pipeline for Ireland’s two largest markets, Britain and US, is strong in the near term and it is important that Ireland retains confidence in the enterprise economy which is showing very encouraging signs of recovery.

“FDI generates more jobs per head of population in Ireland than in any other country and Ireland was the only country in the eurozone, bar Germany, to record an increase in export activity in the first half of this year,” he said.

The minister was speaking in Britain last night where the IDA were pitching for investments.

He assured representatives from 38 top firms who were gathered at the Irish Embassy in London that the Government does not plan to make any changes to Ireland’s 12.5% corporation tax rate in next month’s budget.

“Ireland’s 12.5% corporation tax rate is a vital draw for foreign direct investment (FDI) and it remains a key component of our industrial policy.

“It is one aspect of taxation that will not change in next month’s budget,” he said.

Mr O’Keeffe told the firms from industries such as financial service, life sciences, telecoms and media that the level of FDIs in Ireland is now back to pre-recession levels.

“A combination of improved competitiveness, our corporation tax rate and decisive corrective measures on the public finances, coupled with other factors such as language, education and skills base, has allowed Ireland to out-perform other larger nations for FDIs,” he said.

More than 7,800 workers are employed by 106 British firms in Ireland, making it the largest source of FDI after the US.

Last year, almost one-third of FDI wins were from Britain.

British firms with major investments in Ireland include Vodafone, GlaxoSmithKline, HSBC, BT and Barclays.

“Internationally, FDI was down 30% last year but in Ireland it fell by just 4%. We must have confidence in our ability to reach the goal of sustainable economic export-led growth.

“In the enterprise economy, there are very encouraging signs that we can get there,’ said Mr O’Keeffe.

Meanwhile, Dublin Chamber of Commerce said the minister for enterprise’s announcement that Ireland’s corporate tax rate will remain unchanged will offer clarity to businesses looking to invest in Ireland.