Fianna Fail Spokesperson on Finance Michael McGrath TD has welcomed today’s publication of the Coffey Report ‘Review of Ireland’s Corporation Tax Code’ and has said that the impact of the proposed changes to our corporation tax system would have on corporation tax revenue, Ireland’s attractiveness as a destination for inward investment and the business environment for SMEs must be assessed.
Deputy McGrath commented, “The comprehensive report prepared by UCC Economist Seamus Coffey is an invaluable source of information and analysis in the debate about Ireland’s corporation tax system. Mr Coffey has recommended that consultation be carried out in respect of many of the recommendations set out in his report and I strongly support this.
“The report notes that Ireland’s national accounts have been impacted by a number of intangible on-shoring events in recent years – in particular in 2015 – and has recommended limiting the use of capital allowances for intangibles in order to provide some ‘moderate tax-revenue smoothing benefits’. The impact of the change proposed in the report needs to be carefully considered.
“The section in the report on the effective rate of corporation tax on taxable income is informative. The report states this has averaged 11.8% since 2003 with an outturn of 11.8% recorded in 2015. It is welcome that the ‘level-shift’ increase in corporation tax receipts seen in 2015 can be expected, according to the report, to be sustainable over the period to 2020.
“Our corporate tax regime is of critical importance and is at the core of our industrial policy. We must make sure it remains competitive when compared with other jurisdictions and it continues to attract and create jobs. In addition to this, we must make sure it is sustainable in terms of our tax revenues and we must continue the progress made on tax transparency.
“Above all we must continue to defend autonomy over our corporation tax code. The European Commission’s proposal on CCCTB must be opposed as it simply rewards larger countries and ignores the other corporation tax rates that we apply here in Ireland,” concluded McGrath.