Two fifths of Irish SMEs believe the lowering of corporation tax in Northern Ireland could have a negative impact on the economy in the Republic.
The findings come from the latest Close Brothers Business Barometer, a quarterly survey that canvasses the opinion of SME owners and managers from a range of sectors across the UK and Ireland.
Adrian Madden, from Close Brothers Commercial Finance said:
“It’s an ongoing debate. The proposed reduction in the corporation tax rate from 21% to on or around 12.5% in 2017 is expected to create thousands of new jobs in Northern Ireland, which will help rebalance the economy and grow the private sector.
“However, according to our research, 41% of those surveyed in the Republic say that they are concerned Ireland may face increased competition for foreign investment as a result of the decision.”
The Republic of Ireland has had an admirable track record for attracting foreign investment for over 50 years and as the only English speaking country in the Eurozone with a 12.5% corporation tax rate, it’s regarded as an ideal home for many European organisations, employing tens of thousands of people.
Mr Madden added: “It’s understandable for there to be a sense of unease about the proposed changes but we also need to consider the positives over and above any negative implications.
“Competition is the lifeblood of strong and effective markets and encourages businesses to be innovative, not complacent, with pricing structures, technology and quality of service, for example.
“With this in mind, now is the time for firms to raise the bar to continue to compete within their own industries and ensure Ireland remains at the forefront of foreign investment."
