Fianna Fáil Spokesperson for Finance Michael McGrath has said Ireland needs to enhance its tax system to ensure competitiveness following the announcement by George Osborne that he intends to reduce the UK corporation tax to less than 15%.

Deputy McGrath commented, “If implemented, a corporation tax rate of less than 15% in the UK would undoubtedly raise the stakes in the battle for inward investment. George Osborne already announced in March that the UK corporation tax rate would be reduced from 20% to 17% by 2020. The revelation that he plans to reduce the rate to less than 15% is a measure of how worried he is about the impact of Brexit on the UK economy.

Deputy McGrath has called for targeted measures to retain and enhance Ireland’s competitive position.

He said, “There is certainly no need for Ireland to panic in response to this announcement. It was made in the context of growing worries about the UK economy and comes at a time of deep political turmoil following the Brexit vote. However we cannot be complacent and we must not take our strong performance in attracting inward investment for granted.

“Ireland has historically used its tax policy in a manner designed to attract and retain multinational investment. At the end of 2015, there were 187,000 people employed in companies supported by IDA Ireland. Our corporation tax regime plays a vital role in attracting such jobs to Ireland and we must take action to remain competitive in the years ahead.

“The UK has taken a very deliberate policy decision to use tax as a lever to attract new business. Ireland must adapt its offering in the face of this heightened competition. Fianna Fáil is advocating that the State resists the introduction of a common corporation tax across the European Union. Reform of the tax system relating to intellectual property must take place. We are also proposing changes within the Revenue Commissioners to ensure Research & Development tax matters are dealt with effectively.”