Madam, – Your report on France having a lower effective corporation tax rate than Ireland should cause us to question why our corporation tax rate of 12.5 per cent is so essential to our recovery (Business, March 21st).
Whatever about the optics of the situation, which is indeed important given our less than sound economic reputation on the world stage, perhaps we should have a reasoned debate about the kind of corporate tax regimen we want in place.
Would Ireland be better off with a higher nominal corporation tax rate, with generous tax credits and allowances for multinationals creating jobs and investing in research and development, rather than a system that may encourage a token presence for tax-avoidance purposes without any real or meaningful benefit for our economy, society or international reputation? – Yours, etc,
Madam, – Referring to Enda Kenny’s recent meeting with the euro zone leaders, the Economist has just described Nicolas Sarkozy as acting as the “class bully” in respect to Ireland’s corporation tax rate, despite the effective lower French rate of around 8.5 per cent.
Irish people have always had something of a positive attitude to France, considering its aid to us over the centuries when we were suffering the attentions of what might be described as a large neighbouring bully.
One presumes that as a consequence of President Sarkozy’s seeming attitude of kicking us when we are down, that the Irish people will show maturity and not institute a boycott of French goods. We should not reject French wine, cheeses (all 246 varieties) nor Renault and other French cars. Mais oui, we will continue to purchase Alsthom Luas vehicles and all the other aspects of high technology we enjoy from our French friends. – Yours, etc,
Madam, – The recession is widespread in Europe, but most especially deep here in Ireland. We have accepted financial assistance from Europe for a variety of reasons, the stability of the euro being one. In the midst of all this financial upheaval, uncertainty, unemployment and massive tax increases imposed for the survival of our country, the EU attempts to coerce our country into raising our corporation tax rate, the major avenue open to us to attract foreign capital into Ireland.
Mr Sarkozy in particular, is quite insistent that we raise our rate, while the effective corporate tax rate in France is approximately 8.3 per cent. This is clearly an opportunistic ploy by France but should also be seen for what it is in reality – blackmail. – Yours, etc,
Madam, – Sir Eric Geddes said of the Germans in 1918 before the Treaty of Versailles “We shall squeeze them as a lemon is squeezed – until the pips squeak.”
We all know the tragic outcome of the application of that policy to a crippled Germany. Now one of its perpetrators and its chief victim are intent on taking the same self-defeating approach to a crippled Ireland. They proffer funds with the left hand while doing the lemon-squeezing with the right.
Germany, at least, should be aware of the irony of the situation and the threat it poses to the euro and the stability of the European banking system. It seems to me that Enda Kenny, committed as we are to defending our tax regime, can only say: “Okay, keep squeezing and we’ll all go down together.” – Yours, etc,
Madam, Today’s Irish Times reports on French advertising to promote foreign direct investment. It quotes an effective corporate tax rate of 8.2 per cent, despite the headline rate being 33.3 per cent.
France is the main protagonist in pressing Ireland to raise its corporate tax rate from the existing 12.5 per cent.
Irish politicians are talking tough on this matter suggesting that the 12.5 per cent rate is “untouchable” and “non-negotiable”. Would that they were so gung-ho about arguing for the bailout terms being “unsustainable” and “killing any hope of growth”. Why are such strong positions taken on such simple headlines, when so much more can be achieved through vision and imagination?
No country has proved more adept at building in breaks, incentives and bonuses as part of the tax system than Ireland.
The decision-makers who determine the location of a multinational are well-versed and well-advised on tax loopholes and manoeuvres. They are not some gullible giants that are only blinded by a headline rate.
Ireland sells itself on a number of points. These include political stability and international credibility as an ideologically “neutral” location as well as the use of English as the primary language. We benefit from the diaspora dividend that comes from our global network of emigrants and those touched by Irish influences.
The headline rate is a marketing exercise, but one which can easily be redrawn with greater vigour.
The incentives could then be used to affect social policy as well as economic. Advantages can be given to companies which undertake research, who employ particular groups or in specific geographic areas; who use local suppliers and who support local and community initiatives. Many imaginative schemes can be put in place if we let go of 12.5 per cent.
The new Government promised real reform and a new way of doing politics.
This is a way in which it can be achieved effectively and with real benefit for the country. Sadly it appears that the lowest common denominator of political intellect is still the benchmark. – Yours, etc,
Madam, – The major advantage our country enjoys over our continental EU partners is not our lower corporation tax rate but rather the capacity to serve the wider English-speaking global economy.
If our EU partners are seeking to level the playing field, let them be honest about what is in play. If they are not careful they may end up levelling our country in the process. – Yours, etc,