IFSC tax payment for 2002 steady

Companies operating from the International Financial Services Centre (IFSC) accounted for an estimated 15 per cent of the Exchequer's corporate taxation take last year, according to new figures from the Revenue.

The extent of the contribution emerged during questions in the Dáil last month, when the Minister for Finance, Mr McCreevy, said IFSC companies had paid an estimated €700 million in corporation tax, including advance preliminary tax, last year.

The information came following a question from fellow Fianna Fáil TD, Mr Conor Lenihan, who raised the issue on behalf of IFSC industry newsletter Finance Dublin. The publication later obtained historical figures from the Revenue.

The 2002 payment amounted to 15 per cent of the overall corporation tax take for the year, thus maintaining the IFSC's contribution steady at levels seen in 2001 and above the 12 per cent recorded in 2000.

The amount of tax paid by IFSC companies has consistently increased since the centre was established in 1987 and has more than doubled since 1997.

Mr McCreevy described the IFSC as "a major success" and said the Government hoped that new operations would continue to establish there, despite the removal of the preferential 10 per cent tax rate for new IFSC companies at the end of last year.

The centre houses about 450 banks, funds companies and insurance operations, and about 700 managed entities. It has been suggested over recent months that some of these firms could downsize staff numbers as a result of global economic weakness. At least one international bank has since closed its Dublin operation.

Positive signs continue to be evident, with US investment bank Morgan Stanley saying that it has moved more than €1 billion in investors' assets from Luxembourg to Dublin because of efficiencies in the Irish settlement system.