Paul Mills: From Brexit to corporate tax, snares lie ahead

The events of the year will not only have major political implications but even more importantly they have the potential to have considerable and far-reaching economic consequences not only for us but for most of the world.

EU Competition Commissioner Margrethe Vestager directed Apple should pay the Irish Government €13bn in back taxes.

It seemed like manna from heaven because there are so many problems that €13bn could solve.

On the other hand, however, it meant the Government’s implementation of tax policies was negligent or that the State had entered into an illegal agreement with Apple, and possibly other giant companies.

If this is the case then it is likely that the country’s tax policies to attract foreign direct investment would come under further scrutiny. We should not forget the major part multinationals played in digging the country out of financial problems.

Despite arguments to the contrary, the Government has no option other than to fight the issue. There is so much at stake as the EU continues to snipe at a tax policy aimed at attracting jobs.

The pet project of the euro mandarins, the Common Consolidated Tax Base, is now being pushed yet again. It has the potential to damage the State’s corporation tax revenues. We need to tether those EU mandarins who see themselves as more important and more powerful than national governments.

The early part of the year saw the general election. Rather than giving Enda Kenny and Fine Gael the mandate we elected a mishmash of politicians of very different hues that made it difficult to form a Government.

It was a case of populism in an Irish context. To say that the government of Fine Gael, a slew of independents and supported from outside by Fianna Fáil is fragile is an understatement.

It has survived so far. The potential problems for the economy lie in the Government having to roll over every time there is a new demand for pay increases rather than risk another general election. It has already rolled over for the gardaí following a strike threat. Making economic decisions on this basis does not augur well for our economy. Events around the world were also moving at pace.

In Britain, prime minister David Cameron’s punt on a referendum on EU membership went seriously awry when 52%, or 17m people, voted to leave the EU.

The UK’s pending departure made us realise just how dependent Ireland is on selling into Britain. Small exporting firms have been hit by the slump in sterling, while the implication for the whole of the island is a major unknown.

The biggest uncertainty is the election of Donald Trump. A billionaire, who by every definition could not be a populist, was elected on a blatant populist platform. His selection of the cabinet to run the US makes it a matter of serious concern.

His policies on international trade agreements will have dire repercussions. His policies on forcing US companies to move back to the US potentially will have a major impact on this island.

Back home, a group of housing advocates has taken over Apollo House in Dublin in recent days.

It’s unfortunate the Government’s main focus continues to be strengthening an ungrateful and arrogant banking sector.

Let’s not forget as a nation we’ve crossed higher mountains.


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