Sinn Fein Calls For Increase In Ireland's 12.5% Corporate Tax

by Jason Gorringe, Tax-News.com, London

16 January 2006

Sinn Fein is calling for an increase in Ireland's corporate tax rate to 17.5%, in a major economic policy document advocating a greater emphasis on social justice and rejecting "mainstream market orthodoxies" such as the theory that low taxation equals higher investment.

Speaking on Saturday at the opening of a Sinn Fein party conference on an all-Ireland enterprise and job creation discussion document, General Secretary of the party Mitchell McLaughlin stated that the party's priority is to "build a just economy, dynamic public services and a real enterprise culture that can deliver high skilled and high paid jobs.”

"The document before you today introduces Sinn Fein’s vision of the economics of a United Ireland of Equals. Central to this vision is a clear understanding of the kind of economy we want – that is, a strong economy based on equality and social justice," McLaughlin declared.

"We are committed to rights-based governance and a rights-based economic policy. We want to work with others to bring about the realisation of this vision," he added.

One of the central elements of Sinn Fein's economic vision is a flat rate of corporate tax to be applied throughout the whole of Ireland, including the North. While this could be a popular suggestion for companies in Northern Ireland, many of which pay corporate tax at the UK rate of 30%, firms in the Republic are unlikely to welcome an increase in their 12.5% corporate tax rate.

Asked in a press briefing yesterday whether an increase in tax would drive out foreign investors, McLaughlin said that he "flatly rejected" such an argument.

"What we trying to do is to address weaknesses in the Irish economy," McLaughlin said.

“We recognise some well paid jobs have been created by Foreign Direct Investment but we also recognise global trends. We are concerned that in the past year that 100,000 jobs were created in this state (the South), and yet you still find that the VAT receipts are in excess of the receipts of income tax. So that would indicate that the type of jobs created in our economy are low paid jobs and are not long term jobs."

According to Sinn Fein Enterprise and Employment spokesperson Arthur Morgan TD, there has to be a sea change in economic policy to address this.

“We reject many mainstream market orthodoxies, including ‘trickle down’ theory, the theory of supply and demand, the correlation of low taxation and low wages with competitiveness, the belief that inward investment is the panacea for economic problems, and the oversimplified equation of growth with well-being and social progress," he told the party conference.

Sinn Fein is also calling for the euro to be extended throughout the whole island as part of a “transition to an all-Ireland economy with one tax regime and one currency."

And, by the way, the earth is flat.

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