American Chamber of Commerce demands changes to Ireland's tax regimeThursday 15 May 2014 17.34
The American Chamber of Commerce has said reform of Ireland's personal taxation regime must be a priority of the government.
With over 115,000 people directly employed in over 700 US businesses in Ireland, American Chamber said its member companies were very aware of the high burden of taxation on their employees.
Speaking at the Chamber's Spring Lunch today, Louise Phelan, President of the American Chamber said, "Our role as employers is to support our most important asset - our people and it is in this context that we are calling for reform of the personal taxation regime.
"The high marginal tax rate and the low entry point to that rate are major barriers to attracting and incentivising key talent which must be addressed. Widening the tax bands would reduce the income tax burden on all PAYE workers and would stimulate badly needed economic activity in the domestic market".
Today, US businesses in Ireland account for 70% of all IDA supported employment. US firms paid over €3 billion to the Irish Exchequer Taxes such as Corporation Tax, VAT, and Payroll taxes and contributed to a further €13 billion in expenditure to the Irish economy in terms of payrolls, goods and services employed in their operations.
Ms Phelan said the impact of personal taxation on Ireland's competitiveness, on investment decisions and the ability to retain and attract talent must be recognised.
"There are issues with attracting and retaining skilled employees to Ireland because of the high personal taxation rates. The National Competitiveness Council has stated that the cumulative effect of increases in income taxes, changes to bands, the introduction of the USC and other new taxes, has been a loss of competitiveness in attracting jobs," added Ms Phelan.
She called for a clear roadmap in the forthcoming budget on personal taxation in order to restore lost competitiveness.
Addressing the lunch Tánaiste and Minister for Foreign Affairs and Trade, Eamon Gilmore said that the government is committed to ensuring Ireland remains an attractive location for FDI, applying his focus on maintaining a competitive corporate tax regime,
"I am sure that I don't need to remind this audience that the Government remains fully committed to the 12.5 per cent rate, and to having a clear and predictable tax regime that meets international best practice," Mr Gilmore said.