Government assures multinationals on tax

THE GOVERNMENT is “assuring multinational companies” that the 12.5 per cent corporation tax rate will be retained, Minister for Enterprise, Trade and Innovation Batt O’Keeffe said yesterday.

Fine Gael leader Enda Kenny also promised to retain the 12.5 per cent rate when he welcomed the announcement of 250 new jobs at the Hollister healthcare multinational in Ballina, Co Mayo. “I was a member of the Government which introduced this level of tax in the late 1990s,” Mr Kenny said. “Tax matters are a matter for each country and are confirmed by the Lisbon Treaty which the Irish people voted on by referendum.

“Any increase would be a major breach of trust with international business, particularly US business,” Mr Kenny said.

Hollister senior vice-president Bob Crowe singled out Ireland’s tax rate as one of the key reasons for the company’s decision to commit to a €65 million expansion of its plant in Ballina, which will lead to 250 new jobs.

Two weeks, ago, EU economics commissioner Olli Rehn said it was “a fact of life” that Ireland would no longer be a low tax economy over the next 10 years.

Taoiseach Brian Cowen said he believed Mr Rehn was speaking about the overall tax take.

Mr Crowe said that, for Hollister, the corporation tax rate was “very important”, and both the Government and IDA Ireland has given some “great incentives” to expand. “We rely on internal funding and, with the tax rate, it allows us to reinvest in our facilities, so we keep it locally here in Ballina,” he said.