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News : Irish Economy Last Updated: Mar 8, 2015 - 7:15 AM

Irish Budget 2015: Some reactions of vested interests + others
By Finfacts Team
Oct 14, 2014 - 6:07 PM

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Michael Noonan, finance minister, and Brendan Howlin, spending minister, Government Buildings, Oct 14, 2014

Irish Budget 2015: The IPOA (Irish Property Owners’ Association) called on the 85 Oireachtas members who are landlords (including 9 Ministers) to "get real" about the value of the private rental sector ....

Irish Budget 2015 Page

Accountancy/tax / pensions

EY’s Kevin McLoughlin, heead of Tax comments on Budget 2015

While containing few surprises, EY welcomes the overall Budget package announced today. Unsurprisingly, the Minister announced a change to Ireland’s corporate tax residence rules and a phasing out of the much publicised “Double Irish” tax structure. However, this was balanced by signalling a series of measures to enhance Ireland’s international competitiveness. These include improvements to the R&D tax credit and intangible asset regime and the planned introduction of a “Knowledge Development Box”. The Minister has also been quite progressive with the income tax changes by balancing reductions at the lower end with increases in USC for higher earners.

The proposed changes to the Special Assignee Relief Program (SARP) and the Foreign Earnings Deduction (FED) are very welcome. These changes will benefit both foreign companies investing in Ireland, as well as Irish companies seeking to expand abroad.

EY’s Kevin McLoughlin comments on Corporate Tax Measures

EY welcomes the broad suite of improvements to Ireland's corporate regime announced today.  The enhancements to Ireland's IP regime, R&D credit system and expatriate tax regime will allow Ireland to continue to compete effectively for international investment leveraging Ireland's 12.5% tax rate for profits from substantial operations.

Commitment to introducing a best-in-class innovation box ("Knowledge Development Box") effective as soon as 2016 is particularly important.  These improvements echo EY’s submission to the Department on the BEPS Consultation where we signalled the criticality of presenting a roadmap of planned actions designed to improve our relative competitive standing in an environment of significant uncertainty.

EY welcomes the Government’s commitment to introduce a best-in-class Knowledge Development Box in 2016 following a consultation process.  This proposal will assist in providing a long-term compelling, stable and sustainable platform to multinational companies (both domestic and foreign).  The proposal to introduce the regime well ahead of the longer term impact of potential changes to the corporate residence rules for most investors, will allow Ireland to compete effectively for investment in the near to medium term.

EY’s Ian Collins, Head of R&D Tax Services

In last year’s Budget speech, the Minister stated his intention to abolish the R&D base year when resources allow.  It is encouraging that the Minister has announced the R&D base year to be phased out from as early as 1 January 2015.  The removal of the R&D base year to a volume based regime should significantly enhance Ireland’s ability to attract value added R&D investments, especially for those long established companies who have been hindered by high R&D base year costs.

This is very welcome and should help enhance our international competitiveness, simplify the entire system whilst recognising the long term nature of the R&D investment process.

While the detail of this will be announced in the forthcoming Finance Bill, it is hoped this phasing out will be swift and implemented with administrative ease.

EY’s Jim Ryan, Tax Partner comments on SARP

To increase foreign direct investment into Ireland the Minister had radically overhauled the Special Assignment Relief Programme (SARP) by removing a number of conditions which, to date, have made the relief largely unworkable.  This is to be welcomed and will send a clear message to foreign companies and their senior executive population about the attractiveness of Ireland for both their corporate business and key decision makers, as a base from which to do business.

The Minister has removed the upper income threshold, amended the requirement to have worked for the company prior to being seconded into Ireland from 12 months to 6 months and removed the upper income ceiling. In addition, the Minister has extended the initial qualify period by 3 years thereby ensuring that Ireland will remain a competitive environment until at least the end of 2017.

There was no announcement of any changes to the current tax regime that applies to pensions other than the Minister announcing that the highly unpopular pension fund levy which amounted to 0.75% in 2014 reducing to 0.15% in 2015, will expire at the end of 2015.  This may pave the way for the gradual rollout of a new supplementary ‘mandatory’ pension system in Ireland.  If this levy remained, it would be difficult for people to see the benefit of saving for retirement via a pension scheme whether this be via an optional or mandatory pension arrangement.

EY’s Pat O’Brien, Executive Director, comments on SARP

The SARP relief is intended to attract senior overseas executives to take up assignments here by offering a reduction in their overall income tax liability. The scheme in its existing form had been criticised for being overly complex and failing to measure up to competing regimes in terms of the value of the tax break on offer.

The changes announced today will address these, firstly by removing the condition which limited access to the relief to those who were solely tax resident in Ireland. For many, this was a barrier to claiming the relief due to the differing tax residence rules that apply in countries around the globe. Secondly, the upper limit on the level of earnings to which the relief applied (€500,000) has been abolished. While the latter change is only likely to benefit a relatively small number of international assignees, it should help to attract executives at the very highest level to take up assignments here. The SARP scheme is an area in which the government has taken note of the many submissions that identified issues with the existing scheme, and the comprehensive restructuring of the SARP announced today is commendable.

The Foreign Earnings Deduction was introduced to encourage Irish companies to expand into new markets by sending Irish based employees to carry out activities such as sales and marketing in designated countries. While originally limited to the BRICS countries, (Brazil, Russia, India, China and South Africa) it has been expanded in recent years to cover additional territories. Today's announcement will see the relief extended to employees who travel to Mexico, Chile and to certain countries in the Middle East and Asia. In addition, other changes to the relief announced today, such as a reduction in the number of days which an employee must work abroad in order to qualify, and the inclusion of time spent travelling to and from the work location as qualifying days, will make the relief more relevant and more widely available. This should, in turn, give a boost to Irish companies operating in the highly competitive export sector, particularly in the emerging economies of South America and Asia.

EY’s John Higgins comments on the Agri–Tax Package

Farming growth is unique as it focused on specifically facilitating growth within the rural economy. The newly introduced Agri-Tax package is targeted on making best use of our land resources to ensure active farmers have the greatest opportunities to grow particularly in a post quota environment. These welcome measures will help unlock land that is underused and will assist in growing the rural economy.

EY’s Jim Ryan, comments on Income Tax

In a welcome move Minister Noonan has reduced the top rate of income tax by 1% from 41% to 40%, in addition to increasing the standard rate threshold by €1,000 and €2,000 for a married couple.

He has also increased the entry point for the USC by a little over €2,000 while, at the same time, reducing the rate at which the USC will be charged by ½ percent on approximately the first €70,000 of income.  However, those with income above €70,000 will see their USC liability increase by 1% on income above this limit. The net effect is the marginal rate of tax for those earning below €70,000 will drop by a little over 1% while those earning above €70,000 will continue to have a marginal rate of 52%.

Everyone is a winner under this Budget however those on lower income will benefit at the expense of those on higher income.

EY’s Catriona Coady, Senior Tax Manager comments on pensions

There was no announcement of any changes to the current tax regime that applies to pensions other than the Minister announcing that the highly unpopular pension fund levy which amounted to 0.75% in 2014 reducing to 0.15% in 2015, will expire at the end of 2015.  This may pave the way for the gradual rollout of a new supplementary ‘mandatory’ pension system in Ireland.  If this levy remained, it would be difficult for people to see the benefit of saving for retirement via a pension scheme whether this be via an optional or mandatory pension arrangement.

The Minister defended the retention of the pension fund levy until the end of 2015 by stating that, in its absence; thousands of jobs would not have been created in the tourism sector as the levy assisted in funding the lower VAT rate of 9% on tourism services.

EY’s Ray O’Connor, Tax Partner comments on Financial Services

The elements of the Budget specifically focused on financial services are limited.  However, the sector has a clear interest in the various announcements and confirmations around the 12.5% corporation tax rate and the Irish corporation tax system in general.  In addition, the domestic financial services sector will have a direct interest in the continued improvement in the economy and the Budget’s impact from that perspective.

The proposed DIRT refund for first-time buyers saving towards a house deposit is to be welcomed, though of relatively modest benefit given the low interest rate environment.

The various initiatives mentioned by the Minister, which aim to encourage increased housing supply, should help to support growth in lending volumes for banks operating in the Irish market.  One new tax measure in this area is the extension of the Home Renovation Incentive, available until the end of 2015, to expenditure on rental residential properties.

In addition, providers of pension products and services will welcome the Minister’s announcement that the pension levy, to be charged at 0.15% in 2015, will expire at the end of that year.

Neil Gibson, Economic Advisor to EY comments on stimulus

The strong performance of the Irish economy over the last 12 months gave the Irish government welcome flexibility over its Budget for the first time in six years. The choice was made to use some of this flexibility to reduce tax burdens, rather than focus exclusively on debt reduction. Given the length and severity of the downturn endured by Irish citizens during the crisis, this was a welcome decision. Whilst the reduction is modest when set against recent tax rises (notably water charges) this should help overall confidence levels and, consequently, spending levels in the economy.

Looking global

The Budget began with a focus on maintaining Ireland’s ability to attract and retain ‘world leading firms’.  The recognition that Ireland’s economic future depends on expanding its already significant global footprint is welcome, but an economy cannot survive on exports alone. Firms focused on the domestic market will welcome a number of the measures as well as the growing confidence of the Irish consumer but are likely to continue to face tougher trading conditions than their export focused colleagues.

EY’s John Heffernan, Tax Partner comments on CGT

The lack of an increase in rates for capital gains tax, gift or inheritance tax or stamp duty was welcomed in today’s Budget announcement.  Minister Noonan announced that he would not be returning to tax incentives for property and that normal capital gains tax rates will apply,  however, the Minister will look at alternative measures to ensure property that is zoned and serviced will be released on the market.  These steps are welcome and introduce certainty to the property market.

EY’s John Heffernan, Tax Partner comments on Home Renovation Incentive

The home renovation incentive, which has proved very successful to date, will be extended to rental properties.  To date, €190 million of renovation expenditure spread over 3,000 contractors has been approved under the home renovation incentive.  Under the new proposal, the scheme will be extended to the cost incurred by landlords on renovating rental properties.  The incentive applies to landlords who are liable to income tax which would suggest that it would be available to individual landlords and not to corporate landlords.  However, certain foreign corporate landlords can be liable to income tax instead of corporation tax in relation to Irish source rental income.

EY’s John Heffernan, Tax Partner comments on The ‘Living City’ Initiative

The ‘Living City’ regeneration initiative is at an advanced stage of discussion with the European Commission and it is hoped that approval will be obtained in early 2015.  This initiative, available in Dublin, Cork, Limerick, Galway Waterford and Kilkenny is particularly directed at families who want to renovate pre-1914 city centre properties for family home use.  In such circumstances, the relief will allow for the full cost of renovation to be offset against income tax over a ten year period. The scheme also includes relief for certain retail and commercial properties in pre-1914 city centre buildings.

EY’s John Heffernan, Tax Partner comments on Expenditure for Public Sector Housing

The plan to release up to €2.2 billion of expenditure for public sector housing over the next three years could result in the provision of over 12,000 new public housing units.

EY’s John Heffernan, Tax Partner comments on DIRT

The DIRT rebate to first time buyers who will be able to obtain a refund of DIRT in relation to money saved for the deposit for a new first time home, is unlikely to have a major impact, particularly when interest rates are so low.

EY’s John Heffernan, Tax Partner comments on Tourism

The maintenance of the 9% VAT rate for tourism related activity will result in continued recovery in this sector which, indirectly, will benefit the construction sector as it could encourage the refurbishment, extension and development of new tourism and hospitality facilities.

Tweaks to the Employment & Investment Incentive Scheme including its continued application to the hotel and guest house and self-catering sectors could also result in additional investment in extensions and new builds in these sectors.

EY’s John Heffernan, Tax Partner comments on New Home Builds

Perhaps the only disappointing feature of the Budget in relation to the construction sector is the retention of the 13.5% VAT rate for new home builds.  There was some expectation that the Minister would announce a reduction in the VAT rate to encourage additional new build activity.

Today’s announcement in Budget 2015 of the abolition of the levy by Minister Noonan (following the final deduction of 0.15% in 2015) is to be welcomed.

Pension schemes have paid over €2bn in levy payments since its introduction in 2011. The extension of the levy, announced last year, introduced uncertainty and further unfair charges on pension scheme members.

Joyce Brennan, partner, with Mercer commented “the removal of the pension levy is a welcome move and one which will encourage more employees to commit to saving for a pension”. She added “We know from working with employers and employees that the extension of the levy proved a deterrent to pension provision – the reversal of this unfair and retrospective tax is a positive move.”

The removal of the Pension Levy is also positive news for Defined Benefit (DB) schemes that have been under funding pressure in recent years.

Christian Aid today praised the Irish government’s decision to phase out of the ‘Double Irish’ tax avoidance scheme as a landmark moment in the fight for tax justice. It warned, however, that plans by the government to introduce a ‘Knowledge Development Box’ tax allowance would be a retrograde step.

The ‘Double Irish’ is a tax avoidance strategy used by firms incorporated in Ireland such as Apple, Facebook, Google, Microsoft and Yahoo to pay minimal tax by transferring profits to Irish-registered firms based off-shore.

The Knowledge Development Box enables companies to pay a lower rate of corporation tax on profits earned from their patented inventions. A similar scheme called the ‘patent box’ was introduced in the UK last year.

“It is very positive that the government has taken the decision to phase out the Double Irish,” Sorley McCaughey, head of advocacy and policy at Christian Aid Ireland said today.

“Ultimately it has been hugely damaging to Ireland’s reputation and won us few friends. It is beyond time the government closed down it down.

“The Double Irish has come to symbolise all the elaborate tax avoidance schemes that multinationals and their advisers have engaged in. Many of these schemes have resulted in the poorest countries in the world losing billions every year in revenue that is rightfully theirs – Christian Aid puts the figure as up to US$160bn a year.

Jarlath O’Keefe, head of indirect taxes at Grant Thornton comments on VAT measures in Budget 2015.

VAT rate for Tourism sector
“Those who have been vocal in their support of the retention of the 9% VAT rate in the hospitality sector will see its retention as a victory. There is no doubt that the introduction of the measure has been a success in terms of jobs creation and has provided the tourism sector with a timely boost. Hopefully its retention will lead to further growth in the sector.”

Excise duty increase on tobacco
“The increase will add 40 cent to the price of a packet of cigarettes; a move that will please the health lobby groups. They may have pushed for a more significant increase but the Minister would rightly point that a larger increase could result in an increase in tobacco sales in the shadow economy and a reduction to the tax take.”

No Excise duty increase on alcohol
“Publicans are likely to welcome the fact that there will not be an increase in excise duty on alcohol products although this measure may not, in isolation, help sustain employment in the industry.”

No reduction in VAT rate on construction services
“Leaders in the construction sector had sought a reduction in the rate of VAT on construction services which it was hoped could have stimulated activity in this labour-intensive industry. This, in tandem with an investment programme designed to tackle broadband or energy-related infrastructure projects could have led to the creation of long-term sustainable employment.”

Property interests

The IPOA (Irish Property Owners’ Association) welcome the extension of the Home Renovation Scheme to rental property. It is one of the items that the IPOA have been actively seeking. However there are other important issues that the Minister has chosen to ignore.

Speaking to IPOA members immediately following the speeches of Ministers Noonan and Howlin, the IPOA were highly critical of promised measures not becoming reality. "We were promised that certain inequitable treatment of the sector would be dealt with," said Faughnan. "Minister Noonan repeatedly promised that expenses which are proper to the running of a business, such as Local Property Tax, would be allowed against rental income, but yet again, that promise has been broken. The housing crisis presented a golden opportunity in this Budget for the Government to show their support for the providers of up to 30% of accommodation, some 800,000 people including 78,000 on Rent Supplement, by giving an equitable business break for the private rental sector." He also said that the continuation of a disallowance of 25% of bank interest paid is a "scandal" as it can lead to landlords being required to pay tax on a net rental income loss. "There are many other anomalies which should have been removed in order to incentivise landlords who want to provide decent and affordable accommodation for their tenant-customers," he added.

Calling on the 85 Oireachtas members who are landlords (including 9 Ministers) to "get real" about the value of the private rental sector, the IPOA said that "instead of increasing the supply of property, Government actions are consistently decreasing it." He asked those Oireachtas landlords to "carefully consider" the implications of not treating the business of letting property in an equitable manner. "Minister Noonan, and other Ministers, have repeatedly agreed that property letting is a business," he said, "but it seems to be a business that is expected to contribute far more than its fair share of Government revenue, often extracted by unfair and inequitable means."

Property consultants Savills Ireland has welcomed the decision by Government in Budget 2015 to remove the 80% windfall tax on the sale of rezoned lands.

Savills’ director of research Dr. John McCartney commented: “We welcome the abolition of this tax on the rezoning of land which had been an obstacle to the development of new housing. Bringing this tax into line with standard Capital Gains Tax rates will facilitate the disposal of land banks and allow sites to be sold to developers who are keen to supply new homes”.

Savills also says that the extension of the Home Renovation Incentive scheme will help to boost the supply of housing;

“In our pre-Budget Submission we noted that approximately 6,000 pre-63 bedsits had effectively been removed from circulation by tightened regulatory standards. Today’s announcement that renovation incentives will be available to landlords should accelerate the return of these upgraded units to the market. This will provide much needed supply to the rented market and will help to dampen the rapid rates of rental growth that we have seen in recent months.”

The Society of Chartered Surveyors Ireland (SCSI) has welcomed a range of measures introduced in Budget ‘15 but says the immediate implementation of Construction 2020 measures is critical to meeting the housing supply shortage.

Pauline Daly, president of SCSI said “While we broadly welcome the range of measures introduced we would have a concern that they may not go far enough to address the housing shortage we are seeing in Dublin and other urban areas in the short term. We have seen price increases in Dublin of 25% over the past year due to supply shortages and this is not sustainable.”

“The SCSI has projected a requirement for 35,000 units in Dublin over the next 5 years or around 7,500 a year. This year, just 3,000 units are expected to be delivered which is less than half of what we need. If this supply shortage is not addressed, we are likely to see further volatility in property prices”

The extension of the Home Renovation Incentive Scheme (HRI) which has proved successful in the domestic market and the extension of the Living Cities initiative was welcomed by the SCSI.

“The extension of the HRI, which was recommended by SCSI, and the proposed extension of the Living Cities initiative, will encourage landlords to upgrade the stock of private rental properties” Ms Daly said.

The SCSI also welcomed the announcement of the multiannual approach to increasing social housing supply.

“Increased capital investment in social housing was a key recommendation by the SCSI in its public capital programme submission. The capital investment of €2.2bn for social housing provision for the next 3 years and delivery of 6,700 units is much needed, particularly in the context of the €270m allocation last year”.

“Approximately 89,000 people are in need of social housing support and the key is to ensure that the allocated multi annual funds are fully invested each year” she said.

The SCSI also said that the proposed NTMA house builders’ investment scheme would help bridge the development finance gap which is blocking the delivery of housing.

“One of our key recommendations was to introduce a Builders Finance Fund and we believe that such a measure, if implemented by the NTMA would significantly improve the ability of developers to access funding, purchase sites and build new homes”, said Ms. Daly

The SCSI welcomed the Government’s Agri-Tax review to support a more stable agricultural sector and noted the reduction in windfall tax.

“The 80% windfall tax rate was a barrier to mobility in the land market and we believe reducing it to 33% will encourage the release of zoned land” concluded Daly.

According to Marie Hunt, head of research at CBRE, “Following several years of austerity, the Irish economy and in turn its property sector has clearly started to recover over the last 12 months. We welcome most of the initiatives announced in today’s Budget, which will facilitate this momentum and enable our economy to strengthen further. However, there were also some missed opportunities in today’s Budget, particularly around the area of improving the viability of much-needed private housing development in the Dublin region”.

The property consultants particularly welcomed the Government's commitment to retain Ireland’s 12.5 per cent corporate tax rate, which they say is critical to inward investment and job creation, which in turn drives demand for office and industrial accommodation throughout the country. The property consultants were also complimentary of the Government’s decision to amend the 80% windfall tax on land rezoning, which they say has had a negative impact on the deliverability of much-needed housing in some locations over the last number of years and which has actually generated little or no revenue for the State since its implementation.

CBRE also welcomed the retention of the 9% rate of VAT for the hotel and tourism sector saying that retaining the VAT rate at this level will support further recovery in a sector that has begun to experience an improvement over the last 12 months and which has the potential to generate more employment in the economy in the medium term.

CBRE welcomed the Government’s decision to undertake a public consultation exercise over the coming months to investigate speculation that landowners are intentionally not developing zoned and serviced land saying this is a more prudent approach than implementing rash measures in today’s Budget to penalise developers in the absence of any evidence to the contrary. The property consultants say that the biggest impediments to development at this juncture don’t appear to have been addressed today. They expressed disappointment at the lack of detail in today’s Budget with regard to issues including VAT on housing development, prohibitive developer contributions and planning levies all of which they say are impacting on viability and deliverability. However, CBRE welcomed the Government’s commitment to the provision of additional social housing over the coming years, which will go some way towards alleviating pressures in the housing sector. They also welcomed the allocation of additional funding to address the serious issue of homelessness in the economy.

The Minister For Finance missed the chance to influence the supply and continuing rising cost of new homes in the Budget, according to Chartered Surveyors group Real Estate Alliance.

Landowners now have a greater incentive to offload potential development land as a result of today’s Budget, but more action was needed to increase the supply of new homes to market.

Real Estate Alliance (REA) is Ireland’s leading property group of Chartered Surveyors with over 50 branches nationwide, comprising many of the country’s longest-established auctioneers and estate agents.

“The dropping of the 80% windfall tax on development land may provide some incentive for landowners to offload potential sites as the tax will now fall into line with the standard CGT rate of 33%,” said REA Chief Executive Philip Farrell.

“We also welcome the Minister for Finance’s intention to commence a consultation process on addressing the area of landowners holding on to suitable development lands in anticipation of a large increase in values over the coming years.

“However, we feel that it is crucial that this process is initiated immediately as the fundamental issue in the marketplace is the lack of supply of homes.

“The significant recent increases in property values are not credit driven and whilst the proposed introduction of new borrowing restriction for purchasers for 2015 may stem the demand somewhat, it still does not address the primary issue of supply of new homes.

“We also feel that the Minister missed an ideal opportunity similar to that introduced in the hospitality sector in recent years to temporarily reduce the VAT payable on new homes which currently stands at 13.5% in an attempt to increase the supply of new housing.

“The proposed new lending restrictions on purchasers will create extra pressure on rental values nationally in 2015.

“REA welcome the extension of the Home Improvement Scheme to provide relief for investor/landlords.

“This can only lead to a higher standard of rental housing stock than is currently being provided in the marketplace.”

Business lobbies

The Small Firms Association (SFA) has given a broad welcome to Budget 2015. AJ Noonan, chairman, said: “This Budget will support small businesses in improving access to debt and equity finance, and in boosting job creation by making it more attractive to work and increasing disposable income. However, the continuation of tax discrimination against self-employed workers must stop.”

He added: “The improvements announced to the Employment and Investment Incentive Scheme (EIIS) should assist small businesses by making it more attractive for private investors to invest in small indigenous business and get a tax write off. Banks now demand 30% equity investment before they grant approvals for small business loans, so this measure is critical. This should be followed up with real reform on CGT for entrepreneurs in next year’s budget. We look forward to engaging with Government on the promised development of the Integrated Export Finance Strategy, which is a major gap currently in our financing toolkit.”

On income tax reform,  AJ Noonan, welcomed the reforms announced to the top-rate, marginal tax band and USC changes, stating that these measures “will help small businesses in continuing on their path to growth by strengthening the incentive to work and giving our workers extra disposable income, which should also boost consumer demand, and allow us to create more jobs, in a virtuous cycle.” He also strongly welcomed the abolition of the “unjust pensions levy”.

However, SFA Chairman, AJ Noonan, condemned the decision to extend the 3% additional USC charge paid at the top rate by self-employed which the Minister had committed to lapsing at the end of this year. “It is critical that there is at least equity in treatment between employees and Proprietary Directors / self-employed people in the tax system and that risk takers are not discriminated against. In a still high unemployment economy, we should be doing everything possible to incentivise self-employment and small business start-ups.”

In conclusion, SFA Chairman, AJ Noonan commented: “The government in Budget 2015 have introduced some good measures to support small businesses, including the maintenance of the 9% tourism & hospitality VAT rate, not increasing excise duties, improvements to the R&D tax credit, FED, home renovation fund, Seed-Capital Scheme and the corporation tax relief for start-ups. However, in Budget 2016, we challenge them to be more radical in promoting growth.”

Ibec CEO Danny McCoy said: "The budget will add momentum to the recovery and sends an important signal to taxpayers and the international community that our era of austerity is over. Ireland is again on the front foot."

On income tax: "Income tax cuts will boost economic activity and make it easier for companies to create jobs. The high marginal rate and the early entry point puts Ireland way out of line internationally and is a major disincentive to work, doing overtime or taking a promotion. The reduction to the marginal rate, reform of the tax bands and the plan for more reductions to come will make Ireland a more attractive place to live and work," said McCoy.

On Ireland's international tax offering: "The government has responded assertively to the changing global tax environment. Ireland has sent out a clear signal that we will continue to compete aggressively for mobile investment. The knowledge development box is an ambitious new initiative to improve our intellectual property tax offering. New incentives to attract foreign talent and increase R&D activity will also help make Ireland more attractive than ever for foreign investment," he said.

On public and private investment: "We need to invest much more in the future of the country. New incentives to encourage private investment and an expanded capital programme will pay off in terms of jobs and much needed infrastructure. The government should have been much more ambitious, but it's a start," he said.

On the pension's levy: "The pension's levy was a deeply unfair tax that targeted private-sector workers saving for their retirement. Its abolition is the right thing to do," he said.

On fuel excise: "The change to the fuel excise duty regime will give that sector equal treatment with other excise regimes. It is a sensible move that will help cash flow in this important supply sector," concluded Mr McCoy.

Financial Services Ireland (FSI), the Ibec sector association that represents the IFSC, welcomed the preparation of a new strategy for the international financial services industry.

“The international financial services industry has created over 6,000 jobs across the country over the last five years, and it can grow even faster”, said FSI director Brendan Bruen. “We need to seize opportunities by being the best place to put new business. A new strategy should coordinate public and private efforts with the resources needed to be competitive.”

“The recent appointment of Simon Harris as Minister of State with responsibility for the IFSC is an opportunity to centralise and streamline marketing and decision-making for the industry”, said Bruen.

“Improvements to the Special Assignee Relief Programme (SARP) are essential. Persuading highly-skilled personnel to work in Ireland is crucial to attracting new business here. These staff generate new jobs and tax revenue which would otherwise go elsewhere. Many large employers in the industry were originally set up as niche operations with a handful of skilled staff.”

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Irish Economy 2015: Retail sales volume up 1.4% in month of March