Global tax overhaul will weigh on Ireland's competitiveness, warn top bosses

Most business leaders want finance minister Paschal Donohoe to deliver a conservative budget, according to an Institute of Directors survey.

Finance minister Paschal Donohoe. Picture: Niall Carson/PA

Many top directors of Irish companies believe the overhaul of global tax will erode Ireland’s competitiveness and are urging the Government to focus on boosting broadband, housing, and energy supply rather than fuel consumption in the budget.

The survey of Ireland’s top bosses, carried out by the Institute of Directors (IoD), also found most directors believe it unlikely that the outcome of the tax reform talks, led by the Organisation for Cooperation and Development, will allow Ireland, along with other similar small countries, to keep corporation tax rates unchanged.

Most business leaders want finance minister Paschal Donohoe to deliver “a conservative budget” to prevent the risk of overheating.

It is clear that business leaders want the Government to focus on areas that will help ensure our future international competitiveness, with our research finding that IT infrastructure, affordable housing, and energy infrastructure are the top three priority areas business leaders see as significant to boost Ireland’s international competitiveness,” IoD chief executive Maura Quinn said.

Meanwhile, the latest AIB Purchasing Managers Index survey showed that the output of Irish factories continued to expand in September, although at a slower rate than in recent months, as the strain on global supply chains started to weigh on Irish factories.

The Irish survey is closely watched around the world because a large number of multinationals are based here.

“Output growth, while off its peak, remains strong,” said Oliver Mangan, chief economist at AIB.

New orders, both domestic and overseas, continue to show good growth, though the pace of increase has slowed in recent months.

“The 12-month outlook for production remains very upbeat and, indeed, improved slightly from August.”

Reflecting the global issues weighing on supply chains, the Irish survey showed suppliers’ delivery times “continued to lengthen markedly”, and the cost of inputs rose.

“Having eased in July and August, input price inflation rebounded sharply in September to set a new survey record high,” according to the survey.