The president of the Irish Tax Institute has urged government to ensure that Ireland is not undercut by the corporate tax regimes of competitor countries.
In advance of the planned implementation of a global effective minimum corporate tax rate, Karen Frawley told the Institute’s annual dinner in Dublin that other countries are sharpening their tax incentives and reliefs and pointing to their benefits as they bid to compete for investment against Ireland.
The Irish Tax Institute recently surveyed members and sample businesses about their experience of Ireland’s R&D regime.
Three quarters of the respondents said there is a lack of commercial experience in the process and that more engagement with the Revenue appointed R&D technical experts would make the claims process smoother and more transparent while ensuring compliance.
Referring to the broader business tax code, the Institute president said legislation has become increasingly complex in recent years with the layering of EU anti-tax avoidance rules on existing provisions.
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“While these complexities keep the likes of me in work, simplification of our corporate tax rules would greatly strengthen our competitiveness,” she stated.
Ms Frawley, a tax partner in Deloitte, also noted that Ireland’s comparatively high effective personal tax rates at average salaries and above have become a significant competitive disadvantage.
“Irish workers earning over €48,000 a year pay more income tax than workers in competitor countries such as the UK, Switzerland and the US. Attracting talent to Ireland is now a key obstacle to growth in businesses and the wider economy,” she said.
The Institute president acknowledged that the bill for better public services would have to be paid by the Exchequer, and that tax increases seem inevitable.
“The report of the Commission on Taxation and Welfare will provide guidance but ultimately tax measures are for the government to decide,” she added.
“We are fortunate that even in these uncertain times, companies are continuing to invest in Ireland and create good jobs. And a record amount of capital is flowing into Irish businesses as investors from abroad back our homegrown entrepreneurs.
“The role of government is to foster an environment that continues to attract foreign investment, encourages domestic enterprise, and rewards work. Both of us need to deliver.”
Photo: Karen Frawley addressing the ITI audience at the Clayton Hotel Dublin. (Pic: Julien Behal)
