UK corporation tax move a wake up call
Ibec, the group that represents Irish business, today said the decision by the UK government in today’s budget to further cut corporation tax to 19% in 2019, and 18% in 2020, was a wake up call for Ireland.
The group said the move highlighted the need to improve Ireland’s tax offering to avoid losing business, investment and jobs to rival economies.
Ibec Head of Policy and Chief Economist Fergal O’Brien said: “Britain is fast becoming a more attractive investment location, to Ireland’s potential detriment. It is vital that we match and outperform the UK in its efforts to attract investment without delay.
“A cut to the UK corporate tax rate, along with recent innovation tax incentives, mean the UK now has one of the most attractive tax offerings in Europe. In contrast, Ireland’s attractiveness was significantly eroded during the crisis, particularly due to higher taxes on work. Despite welcome cuts in the last budget, we still have one of the highest marginal tax rates in the OECD. It also kicks in at a low income level, much lower than in the UK.
“Ireland has emerged from the crisis to a very different economic and investment environment than the one that helped us grow before. We cannot rely on past successes to secure our future prosperity.
“We need to improve our tax offering if we are to attract the next wave of investment. We need to make it more attractive to start up a new business and we need to cut our personal income taxes to attract and retain the best talent. Government must also deliver on its commitment to ensure that support for innovation, through the knowledge development box, is the best in class.”