The Government should take pre-emptive steps to close off tax loopholes like the “double Irish” rather than waiting for the conclusion of the OECD review, employers’ group Ibec has said.
The association believes Ireland could gain a “first-mover advantage” on competitor countries by adopting a more pro-active stance. However, it said moves to scrap anomalies within the State’s corporate tax code must be wrapped into a package of measures that further promote inward investment.
"It's crucial that Ireland comes out on a front foot, not saying that it has closed something down, as in a defensive position, because the message to competitors would be that Ireland has been taken out," Ibec chief executive Danny McCoy said following a meeting with the Minister for Finance Michael Noonan in Dublin yesterday.
“A feature of Ireland has always been to be nimble and get ahead, and if can you see this coming down the line, there can be merit in acting pre-emptively.”
Global taxes
Mr McCoy said Ibec saw international moves to overhaul global tax rules as an opportunity for Ireland and that it “wouldn’t lament the closing of the double Irish.”
The scheme, used by several high-profile multinationals operating here, including Google’s Irish subsidiary, exploits differences between Irish law and other jurisdictions to reduce tax.
In the wake of the OECD’s initial review of the global tax regulation environment this week, director of its centre for tax policy Pascal Saint-Amans said Ireland should move sooner rather than later to scrap the contentious scheme.
However, the American Chamber of Commerce Ireland, which represents US firms here, and the Washington-based Tax Executives Institute have taken a more cautious line, warning that any unilateral moves to change the code here could leave Ireland at a competitive disadvantage.
Economic growth
Ibec said yesterday it was now forecasting economic growth of more than 5 per cent this year as well as recommending no additional fiscal adjustment in next month’s budget.
The group said the impressive set of growth figures, published by the CSO earlier this week, represented something of “game-changer” in the State’s hard-won recovery.
The new numbers also reinforced the Government’s scope for tax cuts, it added.
Just three months ago in its own pre-budget submission, Ibec advocated a €200 million adjustment on the basis of a growth forecast for the year of 3 per cent.
“We forecasted 3 per cent of growth all year and now we think growth is going to be north of 5 per cent . . . so that is quite a game-changer in terms of budgetary arithmetic,” Ibec chief economist Fergal O’ Brien said.
