Merrill Lynch weighs in on the Irish Corporation Tax debate;
“Ireland could raise its 12.5pc corporation tax rate by a “moderate” amount and not hurt multinational investment here, the largest bank in the US has claimed.
If Ireland raised the rate by a small amount, it could also lead to a reduction in interest on the country’s €85bn bailout package, Bank of America Merrill Lynch claimed in a note. The bank, the result of a merger at the height of the financial crisis, said simply saying multinational investment would flee from Ireland because of any change was “premature”.
“In the short run, a moderate increase in the corporate tax rate can have the advantage of increasing tax revenue,” its analysts said. “In 2010, revenue from corporate taxation was €4.2bn [2pc of GDP]. An increase in the corporate tax rate from 12.5pc to 20pc [still below the average of the eurozone top statutory rate equal to 26pc] would allow the Government to raise an additional €2.5bn in revenue,” it explained
Meanwhile, the EU is not moving away from the position that Ireland will get a reduction in the EXTORTIONATE Interest Rate being charged on its massive bail-out loan IF it makes a proposal to increase Corporation Tax. As you know, Irish politicians insist they will not accept an increase in this rate. It appears no-one has told them that they no longer run the economy….