US employers demand cuts in tax rates for key staff
THE biggest US employers in Ireland have told the Government to reduce Ireland's income tax rates or risk deterring foreign investment.
The American Chamber of Commerce, whose members include a host of major North American companies such as Intel, Microsoft and Hewlett Packard, called for serious reforms to the country's personal tax regime at its annual spring lunch in Dublin yesterday.
"The high marginal tax rate and the low entry point to that rate are major barriers to attracting and incentivising key talent, which must be addressed," said the chamber's president, Louise Phelan. She is also Paypal's European head.
"As employers of 115,000 people in Ireland, American Chamber member companies are very aware of the high burden of taxation on their employees.
"The additional impact of high personal tax rates is to raise costs for companies as they try to compensate for this tax burden."
Ireland had reached a tipping point, she said, and had now become a high personal-tax jurisdiction.
"Income tax reform is top of the agenda for CEOs at our forums. They see first hand the impact on their own employees and (on their) ability to hire and attract talent." Ms Phelan said widening the lower tax band must be considered.
The American Chamber of Commerce is also concerned about reforms to industrial relations laws, she added.
The Cabinet approved legislation to improve industrial relations procedures this week, in situations where employers refuse to engage in collective bargaining.
The legislation stops short of mandatory union recognition, which would oblige employers to negotiate with unions.
But it beefs up anti-victimisation measures to prevent workers being victimised for trade union activity.
"Great care must be taken that reform of industrial relations rules does not damage competitiveness," Ms Phelan said.
Tanaiste Eamon Gilmore also spoke at the event at Dublin's Shelbourne Hotel. He touched upon the issue of Ireland's corporate tax rate and corporate tax evasion, saying: "Aggressive tax planning is a global issue."