Report highlights importance of 12.5% corporate tax rate

THE importance of the government’s strong stance on retaining the 12.5% corporate tax was further endorsed yesterday when Shannon Development reported that while last year 616 jobs were lost in the Shannon Free Zone (SFZ), there was no company closure.

The 101 companies in the Shannon industrial zone who employ 6,600, are mostly US owned.

Shannon Development, chief executive, Dr Vincent Cunnane said all the jobs losses resulted in companies downsizing. The 362 new jobs created last year in SFZ represented a 4% decease on the previous year.

Dr Cunnane, speaking at the publication of the Shannon Development annual report in the Strand Hotel in Limerick said: “We are delighted the government is putting so much store in the 12.5% corporation tax. In the current unstable economic climate, if US multinationals are forced to pay more for borrowing it may lead companies to think again about investments in overseas countries like Ireland. This is one of the reasons why it is imperative that we continue to be vigilant about protecting our 12.5% corporate tax rate which will be a vital engine for economic growth. Ireland’s competitive corporate tax rate is essential in safeguarding the investments we already have secured and an important selling point in helping us secure new investors. We cannot afford to be complacent on this issue.”

Shannon Free Zone companies generated €3 billion in sales, of which 92% were for the export market.

Dr Cunnane said in-house R&D investment by companies in the SFZ rose by 16% to over €56.4 million.

Shannon Development, which is responsible for Mid-West tourism, report a increase of between 10% and 12% in visitors for the first six months of 2011.