Ireland’s Minister for Enterprise, Trade and Innovation Batt O’Keeffe told a dinner at the Irish Embassy in London at the weekend that the country’s 12.5pc corporation tax rate will not be changed in the upcoming Budget.
O’Keefe told the dinner, hosted by IDA Ireland, that Ireland’s 12.5pc corporation tax rate is a vital draw for foreign direct investment and will remain a key component of Irish industrial policy.
“It is one aspect of taxation that will not change in next month’s Budget,” O’Keeffe said.
O’Keefe said that internationally, foreign direct investment was down 30pc last year. In Ireland, it fell by just 4pc.
Strong export performance by the Irish
“Ireland’s exports continue to perform very strongly and the outlook for next year is positive.
“Exports from multinational firms account for some 80pc of overall exports and Ireland’s continuing strong export performance is key to our economic recovery.
“Our exports increased by 13pc in August compared with the same month last year.”
O’Keeffe said Ireland is the only country in the Eurozone, bar Germany, to record an increase in export activity in the first half of this year.
“Internationally, exports fell by more than 20pc last year. In Ireland, they fell by less than 3pc and services exports actually grew by 2pc.
“That trend underlines our strength in the manufacturing and internationally trading services sectors.”
O’Keeffe said Ireland’s exports are now roughly split 50/50 between products and services. “Key export sectors performing well are pharmaceuticals, biotechnology, medical devices, information communications technology, digital content, and consumer and business services.
“A key reason for Ireland’s strong export performance is our sharply improving competitiveness.”
O’Keeffe said that business input costs, including energy, private rents, office rents, services, construction and labour, have all dropped. Industrial electricity and gas prices costs have decreased by about 25pc.
“Ireland’s track record on talent, technology and tax have earned us a steady flow of foreign firms to our shores across high-end manufacturing, global business services, and research and development.
“It is worth noting that, in two years, the number of IDA Ireland investment wins with a research and development component has gone from 10pc to 49pc.
“I want to make it very clear to you here this evening that Ireland’s 12.5pc corporation tax rate will not change in next month’s Budget.
“The rate is a vital draw for FDI and it remains a key component of our industrial policy. It is one aspect of taxation on which the Irish government is not for turning.
“And we will continue to invest in our most valuable asset – our people – by strategically targeting resources in education and research and development.
“There is no doubt that our public finances are facing severe challenges but the Irish Government has taken strong and decisive action to put them back on a sustainable footing.
“We have established a new regulatory framework for our banking system, recapitalised some of our domestic banks and put in place new structures that will deliver business credit,” O’Keeffe told the dinner that was attended by some of the UK’s most prominent industrialists.
More than 7,800 workers are employed by more than 106 UK firms in Ireland, making the UK Ireland’s largest source of foreign direct investment after the US.