THE AMERICAN CHAMBER OF COMMERCE has welcomed the publication of the government’s four year budget plan, and has praised the decision not to increase the country’s corporation tax rate of 12.5%.
It had been feared that the government would be forced to increase the 12.5% rate as part of its negotiations with the European Central Bank and International Monetary Fund, but this afternoon’s publication said that the cornerstone rate – considered one of Ireland’s major international competitive advantages – would remain unchanged.
American Chamber of Commerce chief executive Joanne Richardson said the clarification that the tax rate would remain unchanged would “reassure corporations planning future investment decisions”.
Richardson estimated that global foreign direct investment would grow by about 30% worldwide by 2012, and the maintenance of the rate – combined with the existence of many high-profile multinationals such as Microsoft, Google, Pfizer, Facebook and Intel in Ireland – would bolster Ireland’s chances of attracting some of that investment.
“Foreign direct investment accounts for €110 billion, or over 70%, of total exports in the Irish economy, as well as 240,000 jobs, 55% of corporation tax, €19 billion in direct expenditure, €7 billion in payroll costs and 73% of spending on research, development and innovation,” Richardson added.
American-based multinationals alone, she continued, employed 100,000 people.
Jobs and investment won by Ireland, she added, would benefit and contribute to a stronger economy across the rest of the European Union.
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