Attracting talent is ‘biggest challenge’ for Irish employers, says Irish Tax Institute president

Attracting talent to Ireland is now a key obstacle to growth in businesses and the wider economy, Irish Tax Institute president Karen Frawley says.

She is urging the Government to foster an environment that continues to attract foreign investment, including further investment in public services, but one that also rewards work.

And speaking to an audience that included Minister for Public Expenditure and Reform Michael McGrath, she will say the Government needs to ensure Ireland does not allow competitor nations to undercut our corporation tax regime ahead of the introduction of new rules for a global effective minimum corporate tax rate of 15 per cent as agreed under the auspices of the Organisation for Economic Co-operation and Development.

“Those of us working in international tax have already seen that other countries are sharpening their tax incentives and reliefs and pointing to their benefits as they bid to compete for investment against Ireland,” she will say.

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Introduction of the new regime has been set back by opposition from Poland and by uncertainty over whether the new rules will be approved by the US Congress.

Addressing the institute’s annual dinner on Thursday, Ms Frawley will say that Ireland’s comparatively high effective personal tax rates at average salaries and above have become a significant competitive disadvantage.

“Irish workers earning over €48,000 a year pay more income tax than workers in competitor countries, such as the UK, Switzerland and the US,” Ms Frawley will say, in an address seen by The Irish Times.

The tax industry chief will call for further investment in public services, which she says is “critical” in attracting inward investment, but acknowledges that that will likely mean further tax increases.

“Availability of good quality housing, education, health services and public infrastructure are as important to the talented workers we want to attract to our country as they are to those of us who live here,” she will say.

“Making Ireland a good place to live and work in must be a clear priority.”

Acknowledging that the bill for better public services would have to be paid by the exchequer, she will say that tax increases seem inevitable.

Ms Frawley will say that simplification of our corporate tax rules would greatly strengthen Ireland’s competitiveness. She says Irish tax legislation has become increasingly complex in recent years with the layering of EU anti-tax avoidance rules on existing provisions.

“While these complexities keep the likes of me in work,” she will say, “simplification of our corporate tax rules would greatly strengthen our competitiveness”.

She also refers to a recent survey of members carried out by the industry group on their experience of dealing with Ireland’s research and development incentive regime. Three-quarters of the businesses surveyed said there was a lack of commercial experience in the process.

They also said that more engagement with the Revenue appointed R&D technical experts would make the claims process “smoother and more transparent while ensuring compliance”.