Ireland needs to rethink FDI strategy to meet new challenges – Quinlivan
Sinn Féin spokesperson on Jobs, Enterprise and Innovation Maurice Quinlivan TD today called for a rethink of Ireland’s approach to attracting Foreign Direct Investment to Ireland in order to meet new challenges faced by major changes in the international political and economic environment.
The Limerick City TD said:
“The global environment for Foreign Direct Investment has changed radically and rapidly in the past year. In that time, Britain voted to leave the EU, Donald Trump was elected President of the US and a distinct move away from globalisation has been evident in many political campaigns around the world.
“The United States’ move towards cutting corporation tax to 15% and their move to introduce a one-time tax rate to incentivise companies to repatriate their profits to the US will pose a direct challenge to Ireland’s traditional targeting of US companies for FDI. Currently, 74% of all IDA supported employment here is from US firms.
“With Britain departing the EU, the potential for Britain to rebrand themselves as a low tax low regulation environment aimed at multinationals is quite real. As a result of these moves from Britain and the US, Ireland could find itself squeezed in the middle of a substantial adjustment of the current FDI environment.
“Ireland must be prepared to meet these challenges and take advantage of the opportunities;
“Brexit means that many multinationals based in Britain will need to establish themselves in another EU member state to maintain access to the single market. To date, Fine Gael has not capitalised on this. Major firms have already chosen to locate elsewhere in Europe, most recently Lloyds Bank to Brussels and AIG to Luxembourg, to name examples.
“The shift in the United States’ tax policy gives Ireland the opportunity to forge stronger FDI relationships with emerging economies. Currently, we are extremely reliant on American FDI, at the expense of other major economies. For example, on the IDA listing of multinationals; only 7 Chinese, 6 Indian and 2 Russian companies are listed, despite these being some of the largest economies in the world. In a similar way to how Irish exporters need to diversify their exports from a reliance on Britain, Ireland needs to diversify our FDI from a reliance on the US and build a portfolio of global companies here.
“Yesterday, Revenue outlined that 10 firms pay nearly 40% of Irish corporation tax; this makes a large portion of our tax intake unsustainable and vulnerable. More investment is needed in Enterprise Ireland and InterTradeIreland to ensure indigenous Irish businesses have the ability to expand, which will result in a greater balance of corporate tax take.
“The Government need to rethink their traditional approach to FDI investment, diversify the nationalities of multinationals here, and ensure that our corporate tax take is sustainable.”