Corporate tax rate not our main asset: Kenny

IRELAND’S competitive corporation tax rate is not the main reason the country attracts so much foreign direct investment (FDI), according to Taoiseach Enda Kenny.

In an interview with The Wall Street Journal, Mr Kenny said that while the 12.5% corporation-tax rate was a cornerstone in attracting FDI, it is not why the country is so attractive to overseas investors.

“Foreign investors like decisiveness, they like clarity,” he said. “There isn’t confusion about Ireland’s corporate tax rate: it is 12.5%. End of story.

“But that is not why major corporations come here. It is a cornerstone undoubtedly of why companies might invest in Ireland. But no matter what the business is, it is always about people that can actually develop it and grow it. You are talking about the personality of Ireland in so many ways, which is creative, which is energetic, which is flexible.

“So all of them are here, and they are not just here because of the CT rate, they are here, as the CEO of one Silicon Valley company said, because of the passion of the young people to build and to work the challenges that everybody faces.”

The Taoiseach pointed out that other countries have lower corporate tax rates. Some have practically negligible tax rates, but they do not attract the same volume, or the same range as happens here. Essentially it is about the environment, the atmosphere, the consequences of coming here which is that you interact in a way that creates the new world.

“You could have, in theory, a harmonised corporate tax rate, but you would still find that the difference here is, as that CEO from Silicon Valley said, is the passion you find in the young people,” he told WSJ interviewer Ben Rooney.

Mr Kenny said Ireland now has to deal with the indigenous economy, which has been flat.

“We are going to focus on jobs and on small and medium enterprises at which we can excel, and I must say, in the seven months as prime minister here, the evidence is that people do want to start up new companies, so what the state has to do is to provide the environment and encouragement that can actually happen,” he added.