Ibec, the group that represents Irish business, yesterday noted the new tax plan launched by US President Donald Trump, which if passed in full, could provide some competitiveness pressure for Ireland, but the implications would be much less serious than if earlier proposals had progressed.
Ibec claim changes in the international tax environment over recent years have already put a greater focus on the other elements of Ireland's mobile investment offering.
They believe that domestically, the best response to President Trump’s announcement is to ramp up investment in Ireland's education system, increasing the attractiveness to high skilled workers and for government to show much greater ambition in a capital infrastructure programme.
Ibec further claimed that there will be plenty of obstacles to overcome to reach implementation stage of the proposal to cut the US headline corporate tax rate to 15%; not least that it represents a massive fiscal cost of $2 trillion over its first ten years. The group believe that even if the US succeeds in delivering a substantial rate cut, the proposition for US firms to invest in Ireland remains compelling.
Ibec's Director of Policy and Public Affairs, Fergal O'Brien said, "Our tax rate remains important in the competition with other investment locations but clearly it is only one of a number of factors, such as talent, ease of doing business and cost competitiveness, which influence investment decisions. The repatriation holiday, on the other hand, is unlikely to have any material impact on investment by US firms in Ireland."
Source: www.businessworld.ie