ICT Ireland welcomes
Budget 2006

8 Dec 2005

ICT Ireland, the association that represents the high tech and ICT sector, today welcomed the Government’s commitment to retain the corporate tax rate of 12.5pc and called on the Government to resist any pressure towards EU tax harmonisation. This is a significant issue for the foreign-owned ICT companies based in Ireland.

The high-tech sector also welcomed the Government’s decision to create a new PhD level of education. “Investment in education is absolutely necessary if Ireland is to develop as a true knowledge economy. An increase in the number of PhDs will allow Ireland to compete globally for mobile research and development (R&D) investment as well as creating a favourable environment to stimulate R&D in the indigenous ICT sector,” Kathryn Raleigh, director of ICT Ireland, said.

However, ICT Ireland is concerned that the Government missed an opportunity to address the falling number of students choosing science, engineering and technology at second and third level. “Industry and the Government must act immediately to ensure that we have the numbers of students choosing these subjects, if we are to fill the extra PhD places created by the Government in this year’s budget,” Raleigh said.

ICT Ireland raised concerns with the Government’s failure to announce any detailed measures on the R&D tax credit scheme initial feedback from companies indicates that the scheme, introduced in 2004, is not having a material impact on the level of R&D activity, in particular in the developing ICT companies. The sector had hoped that the Government would use this opportunity to review the scheme and put measures in place to address its shortcomings.

In conclusion, ICT Ireland supports the Government on its strategic approach in terms of creating a fourth-level education sector, but called on the Government to consider the immediate and long-term problems created by the falling numbers of engineering students.

By Lisa Deeney