Press release 18.3.16
“Already Ireland is feeling the first drafty breeze of a potential chasm which may develop if the UK leaves the European Union.”, says Mr. Sean Melly, serial entrepreneur and Seanad candidate. “This UK budget tax package is a statement of intent by the UK. In their efforts to have a ‘plan B’ ready for a possible exit from the European Union, the UK government is offering a package of tax incentives which could damage the Irish investment environment.”
“Most worrying is the reduction of the UK capital gains tax (CGT) from 28% to 20%. It is still 33% in Ireland. “, says Mr. Melly, “ This means that Irish entrepreneurs can move their centre of control to the UK, losing businesses, jobs and tax revenue.”
“I’m in favour of reducing CGT in Ireland for ‘productive’ capital gains, for example, people starting and building a business and taking risks need a lower rate ofCGT, but this shouldn’t apply to unproductive investments, like sitting on land for years. In the late 1990s, Charlie McCreevy dropped Irish CGT to 20% and actually increased CGT revenue, so this move may not mean lost tax revenue.“
While others are concerned about the UK’s proposed reduced corporation tax rates, Mr. Melly is less worried about them. The UK has been steadily reducing the corporation tax rate from 30% in 2008 to just 17% this week. This compares with Ireland’s attractive 12.5% corporation tax rate, which has succeeded in attracting major employers like Pfizer and Apple.
“But these are ‘headline’ tax rates.”, says Mr Melly, “In reality Ireland’s effective tax rate is in single figures. While a UK exit from the EU would be bad news for Ireland in general terms, ironically, Ireland could actually offer an even more attractive proposition for multi-national corporations with EU access and low corporation rates. “
Sean Melly, entrepreneur and businessman is standing as a Seanad candidate on the TCD panel. He believes there should be more experienced business people in government and he wants to be a voice for business in the Seanad.