Mr. John Whelan:

The low rate of corporation tax here has been extremely valuable to the economy and is responsible for 90% of our exports. A large proportion of our expertise in international trade - even that of indigenous companies - comes from companies which spin off from multinational companies. We have been obtaining good returns from the corporation tax rate. I accept that there is a need to develop many more indigenous companies. It must, however, be borne in mind that when we do develop such companies, they end up being taken over by multinationals. As a result, they are suddenly outside the loop again. We find that the published and actual effective rates of corporation tax differ. For example, the Netherlands has all sorts of deals available which lead to its effective rate being reduced to a rate below ours. In addition, the French have an effective rate which is very similar to ours. The corporation tax issue is occasionally singled out, but, by and large, our rate is probably reasonable, particularly if various deals are not put in place to reduce it.

Deputy David Norris referred to an exit strategy. The position in this regard is similar to what would happen if one were trying to execute an exit strategy from the global banking structure and the related bonus culture. Unless everyone agrees to something globally, those with the skills to manipulate financial markets will move to wherever they can minimise their tax exposure. It is the same with corporation tax. Ireland is only one player on the global scale. It is a reasonable player which provides clear governance rules for investment and the return on investment out of the Irish market. Ireland is not a banana republic. If we remain on our current path, we will continue to do well. We would only execute an exit strategy if other countries also began to exit. Meanwhile, we are reasonably well positioned.