Following a weekend of G7 discussions on global corporate tax rates, support from across the political spectrum is needed to protect our current tax system and ensure the safeguarding of the Irish economy and jobs, a Fine Gael TD has said.
Fine Gael TD Deputy Alan Farrell said, “While the G7 group endorsed a 15% global minimum levy on corporate tax rates last weekend, we’ve seen political parties here in Ireland supporting an increase in our current corporate tax rate.
“Labour’s Deputy Ged Nash recently came out and backed an increase in our corporation tax rate. Such an increase would not only have a potentially harmful impact on the jobs of thousands of Irish people working for multinational companies, it would also affect our small and medium Irish-owned businesses.
“These comments from Deputy Nash indicate that the Labour Party is lurching too far to the left, moving away from the pro-business, pro-enterprise consensus that has served us well, including when Labour was previously in Government.
“Sinn Féin has also recently come out on the issue, with Deputy Pearse Doherty questioning whether it would be ‘beneficial’ for Ireland to adopt a 15% corporate tax rate for multinational companies.
“Now more so than ever, we need all parties to support our current corporate tax system.
“Ireland’s corporate tax system is a cornerstone of our economy; corporation tax receipts reached €11.3 billion last year – a record high and a €950 million increase on 2019 takings.
“Our continued strength in corporation tax revenue means that we are borrowing less than would otherwise be the case and it has assisted us through an extremely difficult period by helping fund Covid supports such as the PUP, CRSS and EWSS.
“We need to remain steadfast in our commitment to protecting our tax system to support our competitiveness as a small country on the international stage. Fine Gael has continuously defended our corporate tax rate, and we now need to see all other political parties, including the Labour Party and Sinn Féin, doing the same to ensure the security of Irish jobs and businesses.
“Reform of our corporate tax system won’t just impact the multinationals that have been attracted to Ireland over the past 15 years. In their report published last month, the ESRI warned that higher rates of corporation tax would also affect domestic firms and Irish businesses, including SMEs which account for almost two-thirds of our employment.
“The determination of Irish tax rates is our sovereign matter. It is not to be dictated by external bodies, including the EU and the G7. Any move to substantially increase our rate would be counterproductive and injurious to the Irish economy.
“If we do see significant changes to our global tax system, multinationals operating in Ireland may need to look at operational alternatives, with the possibility of establishing their headquarters in Ireland a viable option for some companies to consider”, concluded Deputy Farrell.