Fianna Fáil Spokesperson on Finance, Michael McGrath has said that the decision of the UK Government to reduce its corporation tax rate by 1% to 19% is the latest sign of the UK’s efforts to become more competitive as they prepare to exit the European Union.

Over the next number of years, the UK Government plans to reduce it further to 17% by 2020 compared to a rate of 23% in 2013.

Deputy McGrath commented, “The continued reduction in the UK corporation tax rate should bring an end to any complacency in our inward investment strategy. Within the space of seven years, the gap between Irish and British rates will have shrunk from 10.5% to 4.5%.

“The UK is not alone in their decision among our main trading partners. The new US administration has signalled its intent to reduce its corporation tax rate from 35% to 20% or even to 15%, while there are sustained efforts by the European Commission to harmonise the approach to corporation tax across the EU.

“Total employment in Ireland by overseas companies now stands at just under 200,000 people. Our 12.5% tax rate has unquestionably played a significant role in enticing these companies to locate and invest here, and to remain here. We must continue to defend our corporation tax rate and our right to have our own corporation tax system.

“The challenges posed by Brexit are gradually becoming clearer. The UK will make every effort to become more competitive and more attractive as a destination for inward investment. We must develop a strong pro-enterprise environment that works for multinationals but also for SMEs throughout the country.

“This involves the need to implement ongoing reforms to make Ireland more business friendly and a determined resolve to tackle structural issues in our economy such as the lack of housing, the need for high quality broadband, ongoing infrastructure improvements and increased investment in our education system.”