Corporation tax only part of the picture

OFFICIAL figures for exports show two starkly contrasting case histories in our pharmaceuticals and computer manufacturing sectors.

In 2001, Ireland exported €9.0 billion worth of pharmaceutical products. That figure increased by €15.3 billion over the following nine years. It reached €24.3 billion in 2010.

There was a decrease of €16.5 billion in the figures for exports of computer equipment over the same period. Exports of computer hardware were €21 billion in 2001, but only €4.5 billion in 2010. The intention of our low rate of corporation tax is to encourage global corporations to do business here. If that is true for our pharmaceutical industry, why was it also not the case for our computer manufacturing industry? The answer is that some companies in the computer sector relocated to other countries where labour was cheap. This was notable in the years from 2000 to 2003. Since that time, the emphasis in the computer industry in Ireland has shifted from the manufacturing to the service sector. We have a highly educated, experienced, competent, hard-working and dedicated workforce.

Let us not lose sight of the fact that corporation tax is only one element in the mix of factors that attract foreign investment to Ireland.

Michael Mernagh

Carrigaline

Co Cork