Corporation tax rate of 12.5% 'not Ireland's unique selling point', claims Michéal Martin

The Taoiseach cited Ireland joining the European Union as critical to the continued economic transformation of the state

Taoiseach Micheál Martin said the Government has not signed up to the OECD consensus around setting a base corporation tax.

Ireland's lucrative 12.5% corporation tax rate is "not a unique selling point" for multi-national companies and never was, the Taoiseach has claimed.

Micheál Martin has told the Dáil that negotiations that would see corporation tax set at a minimum 15% are "not complete at all" and Ireland is seeking further clarification on the issue.

However, he claimed that our low corporate tax rate "on its own is no longer a unique selling point," adding: "It never was, actually."

Instead the Taoiseach has said that investment in education and our joining the European Union were among the "fundamental pillars" which have lured multi-national companies to Ireland.

Pointing to the housing crisis and potential interruption to power supply, Social Democrats co-leader Catherine Murphy suggested that large firms will no-longer see this country as attractive if the tax rate is increased.

"Why would they go to a country where workers cannot afford a home and it is not guaranteed that the lights will stay on, when they can go elsewhere and not suffer a tax penalty for doing so?" she asked.

Today on Leaders’ Questions: the Corporation Tax Rate and what will Ireland’s Industrial Policy look like if the 12.5% rate increases?

What will our USP be after that change?

We need to address the infrastructural deficits, the cost of living, housing and health to attract FDI pic.twitter.com/BD36kpAVSQ

— Catherine Murphy (@CathMurphyTD) September 28, 2021

Mr Martin said the Government has not signed up to the OECD consensus around setting a base corporation tax.

"The reason we have not done so is the lack of certainty in what has been proposed so far. The key issue for those who invest in Ireland is that they want certainty over the overall industrial policy framework, including tax."

He added that companies did not want a situation in which the base rate will change every two to three years.

"The first point I will make is that the corporation tax rate is not the unique selling point in attracting foreign direct investment into the country. One of the most important decisions made by modern Ireland was to join the European Union. That has been critical to the continued economic transformation of our country.

"Second, I point to the decision in the 1960s to bring in free second-level education and to open outwards. The Lemass leadership of opening outwards was a key turning point in modern Ireland."