Osborne's plans should be a wake-up call
Published 09/07/2015 | 02:30
Plans by George Osborne for yet another cut to the UK's corporation tax rate reminds us of the competitive nature of the foreign direct investment market.
Ireland's 12.5pc offering has been a crucial component of the state's economic plan, and the regime has helped lure global giants, particularly in the technology sector, to our shores.
But we're facing pressure from two quarters: from London on the one hand, which wants a share of our success, and from Brussels on the other, which is keen to ensure that success is built on a regime that is fair and transparent.
The fact that by 2020, the UK government will, in a decade, have reduced its corporate tax rate from 28pc to 18pc shows just how determined it is to ensure investment is diverted away from Ireland and into Britain.
Business chiefs here argue this should be a wake-up call, insisting more needs to be done to make the overall tax regime more attractive from a business point of view.
"A cut to the UK corporate tax rate, along with recent innovation tax incentives, means the UK now has one of the most attractive tax offerings in Europe," warned Fergal O'Brien of Ibec. "Ireland has emerged from the crisis to a very different economic and investment environment. We cannot rely on past successes."
That altered environment also includes changed attitudes to global tax avoidance by big multinationals, and Ireland's corporate tax regime has come under increased international scrutiny, from the European Commission, the US Senate and the OECD.
When it comes to tax policies, the world isn't standing still, but having long settled on an unchanging 12.5pc rate as the cornerstone of our investment policy, there is a real danger we are.