Banking body argues for strong signal on corporation tax rate in IFSC strategy
Cantillon: State should signal 12.5% rate is sacrosanct, says banking federation
The Government’s draft strategy for the IFSC has targeted 10,000 new jobs over five years. Photograph: Bryan O’Brien
The Government’s plan to frame a new strategy for the IFSC out to 2020, drew more than 100 submissions from interested parties late last year. A draft strategy has targeted 10,000 new jobs over five years with more than 20 action points identified for the Minister of State Simon Harris to consider.
The submissions have yet to be made available but Cantillon has had sight of the document presented by the Banking and Payments Federation Ireland, which represents banks and payments organisations here.
It argues that Ireland should send out a strong signal that the country’s 12.5 per cent tax rate is sacrosanct. The federation also calls for an increase in the supply of suitable third-level graduates, a continuation of the business-friendly environment, and for the Government to address the “high personal tax rates”.
There were also some pointed remarks about the role of the Central Bank in the development of the sector here. After years of light-touch regulation in the years before the crash, the regulatory regime here has changed substantially with the Central Bank recently flexing its muscles by introducing new limits on mortgage lending, in spite of opposition from the banks. Judging by the federation’s submission, its members are disillusioned at the length of time it takes for the Central Bank of Ireland to make decisions. “Many of our members see the environment conducive to innovation and evolution but several cited the timeliness of decisions by the Central Bank of Ireland as having a significant impact on their operations which was out of line with their expectations and experience in other jurisdictions,” it said.
The federation is also concerned that the Central Bank’s eagerness to impose new rules might be putting the international financial services sector here at a disadvantage. “Being the ‘best in class’ or gold plating proposed practices can place Ireland at a disadvantage to other jurisdictions. We would like to see more impact analysis performed in the future,” it said.
It will be interesting to see if Harris’s final strategy, which will be published next month, includes measures that reflect these concerns.