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In the past year, Irish corporation tax receipts totaled £19.95 billion, making it the second largest source of revenue in the country, just behind VAT. Cheifly responsible is the low corporation tax rate in Ireland, which is just 12.5%. By comparison, the corporation tax rate in Britain is significantly higher at 19%.
The success of the Irish corporation tax system is evident in the country's budget surplus of 5 billion euros. In contrast, Britain collected a total of £67.2 billion in corporation tax over the same period, which works out to just £978 per capita compared to Ireland's impressive £3,915 per capita.
It seems that the Irish government's decision to keep corporate tax rates low is paying off, as it has attracted numerous multinational businesses to set up headquarters in the country. In contrast, the British government has recently legislated for a 30% increase in the corporation tax rate to 25%. This move indicates that the government is looking to reduce revenues from corporate taxation.
However, Britain could follow in Ireland's footsteps by adopting a similar approach and offering low corporate tax rates to attract businesses. This could be especially beneficial if Britain avoids joining Biden's global tax cartel.