Over the last several months, each week seems to bring more welcome news of overseas companies deciding to establish operations or to expand existing operations in Ireland.
For instance, on Tuesday we read the news that Intel is seeking planning permission for a new 162,000 square metre plant at its existing campus in Leixlip, Co Kildare. That’s a facility of almost 1.75 million square feet and is seen as confirmation that Leixlip had been chosen to produce Intel’s next generation of microprocessors.
Intel, as Ireland’s largest private sector employer, already employs 4,000 highly qualified graduates and other staff at this facility. This new facility is projected to create up to 1,000 jobs in engineering and construction and should underpin the jobs of its Irish employees. All of this, if the signals are being properly read, is a major boost to the economy in these times of doom and gloom. It is an endorsement of the employees of Intel in Ireland and the attractiveness of Ireland as a location for foreign direct investment.
The rapid developments in technology in general and microprocessors in particular means that technology has a very short shelf life before being overtaken by newer, smaller and faster microprocessors. Intel as the major player has to keep ahead of the posse. When it decides on a location, it must be absolutely certain that its objectives can be met. Obviously, Ireland and Leixlip meets that criterion.
There have been many other announcements over the last several months albeit for much smaller projects. However, such projects, big and small, are welcomed, particularly so given the high technology and knowledge based skills required in the resulting employment. As they say, the more the merrier. Indeed, the sooner the better.
As a small nation on the periphery of Europe we have benefited to an enormous degree from our membership of the European Union and our business tax rate. Our very attractive corporation tax rate has come under attack several times in the last few years, particularly from Germany and France.
Our tax rate must be defended at all costs. We might be on the periphery of Europe but we are not a peripheral country. Unfortunately, losing the main plank of our attractiveness as a location would ensure that we very rapidly become peripheral also.
According to Enda Kenny, speaking at the American Chamber of Commerce Ireland debate on Tuesday last, the Fiscal Treaty will not affect the State’s low corporate tax rate or impose other extra costs on multinationals. He must be held accountable for any failure to adhere to that statement.
To placate the EU we had already agreed to a review of how companies’ tax calculations are treated across the EU. The view among some of our neighbours is that companies should be taxed in the country where the product is actually sold on the basis of the volume and value and a host of other criteria.
As a comparatively small country agreeing to such a proposal would be even worse than cutting our headline tax rate.
Our low tax rate would be of marginal benefit as taxes would be accrued elsewhere.
Our confidence in government at this juncture is at a lowest ebb. We are not convinced that our ministers have the wherewithal or the confidence to fight our corner effectively. We are an independent and proud nation irrespective of how much money we owe. We do not need to be doffing our cap or tugging the forelock to anybody in the hope that we might get some crumbs.
There are tough battles ahead. Our government must fight on our behalf and must not blink first. If it cannot do that it should step down now or put people in who do have the bottle.
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