Irish fight to retain corporation tax praised

IRELAND fighting to hold onto its corporation tax rate sends a very strong signal to the international investment community, according to the chief executive of the US Chamber of Commerce.

Thomas J Donohue said that in the face of pressure from the European Union it would have been very easy for Ireland to “throw overboard the favourable tax climate” that has helped transform the country into a “sophisticated hub of innovation, technology and services.

“Instead, Ireland has rightly said no, we’re not going to squander our most important competitive strengths. This is to your Government’s credit and is a very strong signal to send to the international investment community,” he said.

Mr Donoghue said US firms will remain committed to Ireland as long as Ireland remains committed to its economic strengths.

Addressing a dinner held by the Institute of Certified Public Accountants in Ireland (CPA), Mr Donohue said the Irish economy is proving its resiliency in the face of extremely difficult circumstances, driven by the strong base of US multinationals in Ireland.

“The trading relationship between our two countries might originally have been built on the historic social ties binding Ireland and the US, but today it is very much a relationship of strong economic ties,” he said.

US companies employ roughly 100,000 people in Ireland while Irish companies employ an estimated 82,000 Americans in the US.

CPA president Gail McEvoy said Ireland must continue to focus on its competitiveness, but must be careful that measures to increase exchequer receipts, such as the recent pension levy, do not have “unintended consequences which frighten potential investors”.

“Despite the recession, the United States and Europe remain each other’s most important foreign commercial markets. This transatlantic relationship is one which Ireland is extremely well positioned to take advantage of, given the scale of US investment here.

“The close cultural affinity between our two countries and the long standing political, economic and commercial relations between Ireland and the United States have never been stronger or more important as each country seeks to work its way out of recession,” he said.