It is good to see (page 4) the continued commitment of Charlie McCreevy to his original ideals of a European Union that is open and free, and not a fortress built on unsound and uncompetitive principles, such as higher tax, or rigid regulation.
The big tax issue from an IFSC point of view continues to be the preservation of the 12.5 p.c. corporation tax. There is no doubt that, post Lisbon, the campaign to foist a harmonised corporation tax rate on the EU will continue, despite the assurances that tax independence will be maintained.
Meanwhile the injunction to the new Commission on Taxation that Ireland’s low tax regime should be maintained, and that the 12.5 per cent corporation tax rate should be sacrosanct is encouraging, but on page 17 of this issue, Ernst & Young’s P.J. Henehan points out that it might have been even better if the Commission were mandated to look at the possibility of cutting the rate to 10 p.c. Low tax has been central to Ireland’s success in attracting foreign direct investment, the main engine of the country’s rapid growth rate since the mid 1980s. It can continue, if the country chooses for it to, to play a central role in the future success of the economy.
Productivity is abysmal in many parts of the public service, outside of the Revenue Commissioners, as Henehan notes. An improvement in public sector productivity will be key in laying the groundwork for a more benign tax environment in future.
Improved financing is an element in competitiveness and excellence in financing is celebrated in the Finance 2008 Deals of the Year Awards announced in this issue, starting on page 7.
Excellence is key to the winning deals, among them Smurfit Kappa, Equity-Linked Deal of the Year, marking a welcome return for the Smurfit share to the Irish Stock Exchange, and an expansion of publicly traded equity in the country. The Hypo/Depfa deal also marks the excellence of service to a major international financial services sector (IFSC) player. Notable too are deals involving the expansion of financial services regulatory capital (something we shall see a lot more of in the months ahead), and, a tribute to the Irish securitisation sector, two internationally significant securitisation deals that were challenging to complete in the context of the present credit crisis.
And, given the importance of a better, more streamlined, and better financed public sector, the takeoff of the PPP sector, to extend to areas beyond motorway financing, after many years of torpor, as evidenced by the Poolbeg deal and the Dublin Conference Centre deal are also applauded. |
