MINISTER FOR Jobs, Enterprise and Innovation Richard Bruton has told business leaders in Shannon that the Government would defend Ireland’s current corporate tax rate “tooth and nail”.
Mr Bruton was speaking at the Park Inn hotel at Shannon airport yesterday, where 300 jobs were announced in a joint venture between US-based mobile technology accessory firm Zagg and Shannon company Cregg Logistics.
Initially, 170 posts will be created and managing director of Zagg International Distribution Brian Packer said he expected 300 positions to be filled over the next four years.
Mr Packer said that Ireland’s “fantastic corporate tax rate sealed the deal” in the company’s decision to locate here. “It was the icing on the cake.”
The Minister said that there were other countries that had questioned Ireland’s 12.5 per cent corporation tax rate.
“Our Government is determined to defend that tooth and nail. It is vital for US companies and other companies investing in Ireland that they have certainty,” he said.
Mr Bruton said that any rise in the rate “would be disastrous for Ireland and the Government will resist it absolutely. I think there is a growing realisation amongst our colleagues in Europe that the importance of export-driven recovery in Ireland is crucial to Ireland meeting its obligations.
“In the context of an export-driven recovery, the corporate tax rate is the foundation pillar of our approach and the certainty that it gives business must be protected.”
Mr Packer said that when he told Zagg’s chief financial officer (CFO) of Ireland’s corporate tax rate “that was all it took pretty much [to locate in Ireland]. Our CFO was very excited about the opportunity to make savings”.
He added: “That is a substantial saving for the amount of money we are doing in Europe, the Middle East and Africa (EMEA). When we start running that through here, it is a fantastic tax saving.”
Mr Packer revealed that Ireland’s corporate tax rate was behind Zagg’s decision to serve not just Europe, as originally planned, but its EMEA market as well. “There are other countries right now who are being very aggressive. You’ve got to be aggressive or you are going to lose out on opportunities and it is a very aggressive move that the Irish Government is making and it is in their best interests to maintain that.”
The jobs announcement arose from Cregg Logistics seeking out a business partner in the US, with Cregg initially planning to create 130 new posts with Zagg creating 40 jobs.
In the venture, Cregg Logistics will have sole responsibility for the manufacturing, assembly, packaging and logistics aspects of the new venture, while Zagg will carry out the sales and marketing, product design and administrative activities of the European expansion of Zagg’s business.
The announcement comes against the background of Shannon Development confirming earlier this week that the number of jobs in the Shannon Free Zone dropped by 254 to 6,066 last year.
