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Go on the Enda
Opinion: The man is on the right track.
When Ireland went to the polls, I did not want Enda Kenny to be Taoiseach. In fact, I posted comments on the Fine Gael website and they were deleted. Dirty politics if you ask me.
After watching him in Europe, I just want to throw my hands up in the air and say "Ehh..ohh I was wrong(o)". Dressed like a professional, he ventured to Europe to make his claim for Ireland; firmly laying down that those adjustments to Ireland’s corporation tax were simply not up for discussion. Finally, an Irish politician willing to stand up to Europe and to use the voice given by the voters on our lovely wee island.
Ireland’s low corporation tax attracts foreign direct investment to Ireland in its droves and any alteration of the tax - either up or down, will discourage investment. After almost 15 years, the 12.5% tax rate has become a staple part of Ireland’s package to attract foreign investment. Our road to success lies within this magical number. A study conducted by the Organisation for Economic co-operation and development showed that a 1% point increase in corporation tax can lead to a 3.7% reduction in FDI.
So why are Mr Sarkosy and Ms Merkel so determined that a re-negotiation of our bailout package should include an increase in our corporation tax? They aren’t stupid people, they know we will never be able to repay our current bailout and they know (deep down) that if we increase our corporation tax we will never ever ever be able to repay anything. Frankly they don’t care, because as ‘harmonised’ as the EU is, Ireland’s corporation tax poses a threat to their home countries. If an American firm wants to set sail into Europe, it has 27 countries to choose from. Ireland stands out as an attractive investment with its corporation tax. In comparison, Germany and France don’t stand a chance with their high rates of 30.2% and 33% respectively.
When the Irish people voted no to Lisbon, Europe wasn’t happy. We renegotiated and were asked to vote again. One of the deal breakers was that Ireland would not be under any obligation to alter its corporation tax. It’s our tax and we can determine it how we please. So, the happy Irish voters went out and said yes.
Now we have a new threat, the EU Tax harmonisation plans. The plan claims its will save billions for companies every year by allowing them to submit just one annual tax return and supposedly allowing each country to tax the profits allocated to them however they like. Sounds a bit fishy.... An economy without competition is inefficient and bound to fail.
Let’s hope Enda keeps up his performance.
By: Claire Finnegan
