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Friday, 14th August 2020
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Buckley defends cuts Back  
 
The managing director of Allied Irish Banks, Michael Buckley, rounded on critics of the state’s tax reduction strategy over the past few years at the annual dinner of the Small Firms Association, stating that ‘there is often a lot of rubbish talked about low tax rates, as if they were undesirable on grounds of principle’.

‘Irish business is making a substantial contribution through taxation to funding essential public services. Corporation tax has increased almost six fold in real terms over the past 12 years. We hear a lot about the low tax rate from the corporate sector compared to other countries. Yet many of these countries combine higher taxes with significant state aids to the corporate sector. State aids in Ireland are 60p.c. of the EU average. When you look at the net yield of corporation tax in Ireland after deducting state aids, you find that it is twice the level in Austria, France and Spain and a staggering 15 times that in Germany’.

‘A recent US study of the effects of income taxes on the growth of small firms found that cutting a sole proprietor’s marginal tax rate from 50p.c. to 33p.c. would on average increase the turnover of his or her business by about 28 p.c. ‘The growth in small firms encouraged by a lower tax environment, does not just benefit the owners of those businesses. It also benefits society by creating employment. The best form of social inclusion is to give somebody a job’ said Buckley.

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