November 24, 2010
The news from Ireland is that the controversial (in other Member States at least) rate of corporation tax (12.5%) will remain. The BBC reports the full story here.
It seems that chasing away the corporations that have moved to the Republic to take advantage of low tax rates isn’t an option. And that makes a lot of sense. If those taxes were to rise and corporations were to leave, more jobs would be lost and the situation would not be improved.
Whether other governments like the ‘competitive advantage’ that this provides to Ireland, it seems that the Irish fully appreciate the benefits.
The downside, of course, is that there will be a heavier burden placed on the individual tax payer. With a VAT rate set to rise to 24% in 2014, Ireland is about to become even more expensive to visit!
However, this presumes that the measures can actually be passed at a political level.
Either way, you have to pity the Irish. Their economy has had a tough couple of years and it seems set to get substantially tougher. Here in Brussels I have a number of Irish friends. They all tell the same tale of woe ‘back home’. Jobs are nowhere. The unemployed are everywhere. Property prices have been in freefall. Negative equity is common.financialguy