Ireland’s ability to navigate the choppy waters of change following the UK’s dramatic Brexit from the EU will depend on three things: keeping the 12.5pc corporate tax, keeping costs low and the ability to recruit from a pool of 500m people.
PricewaterhouseCoopers’ 2016 CEO Pulse Survey of Irish CEOs found that, aside from Brexit, key concerns include a lack of availability of key skills, which is at an 11-year high, cyber-threats, over-regulation and increasing tax burdens.
The survey highlights that the UK is our most important export market; 38pc of exporters to the UK plan revenue growth of more than 10pc.
‘The single market also allows businesses that locate in Ireland to recruit from a pool of 500m people’
– JOE TYNAN, PWC
As we reported last week, 95pc of multinational CEOs confirmed their investment in Ireland is a success.
But key factors to increase this investment are retention of our 12.5pc corporate tax; maintaining our cost competitiveness, access to skills and reducing the personal tax burden.
Skills shortage in Ireland at an 11-year high
CEOs say the top priorities for Government ought to be a skilled workforce, tackling the accommodation crisis and reducing the personal tax burden
The lack of availability of key skills is at an 11-year high (81pc), with pressure on skills being higher in Ireland than globally. With this stiff competition for key talent, 77pc are concerned about rising labour costs.
Other business threats include: cyber-threats (78pc); increasing red tape associated with tax and compliance burdens (77pc), increased competition (76pc) and the impact of digital on changing business models (63pc).
The inability to finance growth has eased over the last three year, perhaps indicative of more freely available capital from a variety of sources.
More certainty needed, especially around tax
“This survey shows that the top three threats to business all relate to uncertainty and, in particular, Brexit,” said Joe Tynan, head of tax at PwC Ireland.
“Ireland can provide a degree of certainty to CEOs in three key areas. Firstly, as an EU member, we provide businesses with access to a single market of 500m consumers without borders or tariffs.
‘The Government should also focus on increasing its spending on infrastructure, in particular, on housing and office accommodation, as well as on connectivity in both transport and broadband’
– JOE TYNAN, PWC
“Secondly, the single market also allows businesses that locate in Ireland to recruit from a pool of 500m people, and, thirdly, Ireland provides certainty around taxes. We have a 12.5pc corporate tax rate, which is clear and simple. We do not levy additional profit taxes, which allows companies to know exactly where they stand.”
Tynan said international companies are looking for a sustainable tax model.
“Their ideal location is one that provides certainty in relation to taxes, provides a low tax rate, provides access to a large market, provides access to a large pool of potential employees, allows them to develop, own and exploit intellectual property, and has a stable political outlook.
“Ireland provides all of these advantages and we see the result of this as an increasing number of companies deciding to locate here.
“However, we must ensure that we continue to have all of the key ingredients to compete internationally.”
He said that, for example, our personal tax burden is perceived to be high and the Government could focus on one of two things: it could consider enhancing tax reliefs provided to foreign executives, or, alternatively, it could focus on reducing the tax burden on share-based remuneration.
“The Government should also focus on increasing its spending on infrastructure, in particular, on housing and office accommodation, as well as on connectivity in both transport and broadband, to facilitate balanced regional development,” Tynan said.
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