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Scrap 'Double Irish' before we are forced, Ibec tells government

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Larry Murrin with Danny McCoy

Larry Murrin with Danny McCoy

Gary O' Neill

Larry Murrin with Danny McCoy

IRELAND should make a pre-emptive move to clamp down on aggressive tax avoidance schemes like the so-called "Double Irish" and make it part of a suite of tax improvements, business lobby Ibec urged.

The organisation said there is an inevitability that the tax avoidance scheme, used to route global profits through companies here and on to tax havens, is going to be shut down.

The Paris-based Organisation for Economic Co-operation and Development (OECD) unveiled proposals on Tuesday to eliminate gaps in global rules that allow firms to legally shave billions from their tax bills.

Ibec director general Danny McCoy said Ireland is facing pressures not just from the OECD but from within Europe.

"One of the features of Ireland has always been to be nimble and get ahead," he said.

"If you can see this coming down the line, there can be merit in acting pre-emptively but be pre-emptive having your full package thought out," he said.

Mr McCoy said the government should also offer an improved intellectual property tax offering and give greater certainty in the R&D tax credit scheme.

"If you know you're going to have to close it, do it with first-mover advantage, by having a very strong competitive proposition presented to the world," he added.

Ibec yesterday met Finance Minister Michael Noonan and Public Expenditure and Reform Minister Brendan Howlin to discuss its pre-budget submission.

It said the government should be spending about €7bn in capital investment to stimulate the economy, including restarting the stalled road improvement project to Derry and Donegal, as well as water development, and broadband and utility rollouts.

"We all know that there hasn't been terribly much infrastructural spending over the last six or seven years and we want to encourage the government to deal with that in the Budget and lay out a plan for the infrastructure that the country is going to need over the next couple of years," said newly-appointed Ibec President Larry Murrin.

The group also called for no further tax hikes or spending cuts in the Budget. It said the entry point for the marginal tax rate should rise to €34,800 from €32,800 and the high rate should ease to 40pc from 41pc.

Ibec also called on the government to drop the pensions levy and reduce consumer taxes to boost spending power.

Mr McCoy said the economy has the potential to grow between 3pc and 4pc over the next 20 years.

"We are not saying that the government shouldn't meet its international commitments. It has to close the gap between revenue and expenditure. Tax revenues have to go up, but our argument is that they go up by increased activity," he said.

Meanwhile, in light of the likelihood of more devolved powers for Scotland, Wales and Northern Ireland after the Scottish No vote, Mr McCoy said Ibec supports a drop in the corporation tax rate in the North to match the Republic.

"We have an all-island view about business," Mr McCoy said. "Having this island as an attractive proposition has huge spill-over effects for both parts of the jurisdictions."

Irish Independent