CORPORATION TAX INCENTIVES

They may not be politically popular in the current climate of austerity where everyone is feeling the pinch, but maintaining and improving tax incentives for business must remain a core component of industrial strategy, Kevin McLoughlin, head of tax services with Ernst & Young, opines in The Sunday Business Post.

“A low-tax environment for business enhances our ability to create employment and punch above our weight in attracting internationally mobile business,” he argues. “While it is key that our tax system needs to remain highly competitive, it also needs to be nimble and anticipate the future direction of tax policy at a broad international level, and in key investor countries.”

Unless Ireland keeps ahead of the posse, more jobs will be lost and the prospect of creating new ones will prove elusive, he argues.

Tax incentives should be targeted, focusing on high-value mobile investment to include measures such as providing tax incentives for individuals with skills in global demand.

“Often the decision by companies on where to invest can be heavily influenced by the ability to move some of their senior executives to that location to help get operations up and running, or because they will perform important geographic roles,” he says. “Whether we like it or not, levels of personal taxation for people who move to countries like Ireland is a significant factor.”