Ireland's Low Corporation Tax 'To Stay'

The Republic's Taoiseach has moved to assure representatives of US multinationals in Ireland and leading Irish businesspeople that the much-valued 12.5% rate of corporation tax will not change.

As Ireland prepares to go to the polls - without the current Taoiseach Brian Cowen's participation - normal work continues with Mr Cowen welcoming Tom Donohue, President of the US Chamber of Commerce to Dublin.

The former Fianna Fail leader said this was a powerful signal to entrepreneurs across the Atlantic that Ireland "is open and ready for business".

At a breakfast meeting in Iveagh House, Dublin on Tuesday, he noted that the United States remains the primary source of foreign direct investment.

As politicians in Northern Ireland look at ways of bringing down their UK-aligned corporation tax to more competitive levels, they will have listened with envy to Mr Cowen's statement that the low rate 12.5% corporation tax in the Irish Republic will not change - implying that will be the case even after the government changes.

The Stormont First Minister and DUP leader, Peter Robinson said last November that NI needs the ability to reduce its business tax rate to match the rate implemented in the Republic of Ireland as the main level of corporation tax in the UK is 28%.

The Sinn Fein Deputy First Minister Martin McGuinness also said: "The (UK) Treasury and NIO are actively considering mechanisms through which the (Stormont) Executive could reduce our corporation tax rate."

In Dublin, Mr Cowen noted that commerce between both the USA and the Republic of Ireland is thriving, notwithstanding the economic challenges here.

In response, the US Chamber of Commerce boss, Mr Donohue advised that he had travelled to reaffirm the American business community's commitment to Ireland as a vitally important investment and trading partner and to express his "optimism that the Irish and American economies are making real progress".

Mr Donohue also reflected on the strong economic ties between Ireland and the US and noted, "as each of our countries struggle to repair and grow our own economies, we must never forget that our destinies are tied together".

Outlining the resilience that the Irish economy has shown in difficult circumstances, Mr Donohue commented: "The Irish economy is based on the resourcefulness, intelligence, and grit of the Irish people, who are well educated and industrious."

"The American business community still sees Ireland as a good place to invest."

Gerard Kilcommins, President of the American Chamber of Commerce Ireland, said that Ireland has been hugely successful in attracting US businesses into Europe by supporting the establishment of international operations in Ireland.

He reiterated that industry, along with the Irish government and its agencies, is committed to reinforcing and reassuring international markets that Ireland remains a vibrant economy with many opportunities.

The US Chamber of Commerce is the world's largest business federation representing the interests of more than three million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

The Chamber is the biggest single lobbying presence in Washington DC and, as such, has significant influence on the policy-making debate across the range of issues, including tax, trade, innovation, regulation.

The American Chamber of Commerce Ireland represents over 600 US businesses with operations in Ireland and is affiliated to the US Chamber of Commerce.

The US is Ireland's largest merchandise trading partner with merchandise trade valued at €25.4bn in 2009, as well as its largest services trading partner with services trade valued at €29.2bn in 2009.

Figures for merchandise trade for the first 3 quarters of 2010 show an increase of almost 8% in exports from Ireland to the US compared with the same period in 2009.

See: Robinson Pushes For Corporation Tax Cut

(BMcC/KMcA)