Tax: Ireland’s Seductive Charm

by Jason Michael McCann

@Jeggit

Owing to its taxation policies of the late 1990s, Ireland – historically one of Western Europe’s poorest economies – grew rapidly over a decade to become one of the most competitive in the world, and, by 2005, the richest nation in terms of per capita GDP in the European Union after only Luxemburg. Ireland’s “Celtic Tiger” was the handiwork of Taoiseach Bertie Ahern’s Fianna Fáil government, which, in its 1998 budget, lowered corporation tax for trading income to 12.5 per cent – an adjustment that proved instrumental in transforming the Irish economy.

By more than halving corporate tax between 1998 and 2003, to a level six per cent lower than the European average, the national exchequer shot from €27.2bn in 2000 to its 2007 peak of €49.2bn. Almost overnight Ireland had become the place to do business and foreign investment poured into the country, stimulating phenomenal growth over every sector of the economy. On the eve of Ireland’s 2007 financial crisis the country had become a leading international hub for banking and finance, IT and social media, and technology and pharmaceutical industries; hammering down unemployment to its lowest recorded level. In short, Ireland was a success.