Defend corporation tax rate – jobs are at stake

YOU report (October 8) that corporation tax “may hit 17.5%”.

It is difficult to understand why any Irish business would wish to undermine our corporation tax rate or policy. The rate of 12.5% is about creating Irish jobs, now needed more than ever.

The success of the policy is underlined by resistance to it by vested interests seeking to redirect investment away from Ireland to other countries. But the policy also helps indigenous enterprise to succeed.

Corporation tax still contributes more than €3bn a year to the exchequer and is the only tax meaningfully ahead of target in 2010.

While there are European proposals due on standard methods of calculating the amount of company profits which are taxable, there are no proposals to standardise or harmonise corporation tax rates.

EU tax policy is still governed by the Lisbon Treaty, not by German MEPs with a track record in left-wing tax policy, or ambiguous comments by EU commissioners.

The Lisbon Treaty does not permit our corporation tax rate to be changed by external forces.

By EU standards, Ireland is a low tax jurisdiction overall. Because of the exchequer deficit and the cost of the bank bailout, that will have to change.

However, we are not a low corporation tax jurisdiction by EU standards.

We need to be more robust and challenge the motivation behind suggestions that our corporation tax regime must change. Jobs are at stake.

Brian Keegan

Director of Taxation

Chartered Accountants Ireland

Chartered Accountants House

Pearse Street

Dublin 2