Irish Economic Miracle

Alone among the European economies, the Irish economy has for long distinguished itself as successful example of enlightened policy making by the Government. Especially after Ireland joined the EU in 1973, these policies have lifted the country from poverty and deprivation to one of the leading knowledge economies of the continent. These policies include
1. Attractive tax concessions for foreign investors.
2. All education, upto Unversity level, made free
3. An exclusive Public Private Partnership (PPP) initiative that has since bee replicated in many countries
4. Lower corporate and income taxes.

To this comes the latest initiative by Enterprise Ireland, an agency of the Irish government that gives fledgling small companies a helping hand. It proactively takes equity positions in start-up firms, leases space in Midtown Manhattan to provide accommodation for young Irish firms looking to expand in the US, helps set up operations in China by hooking up Irish firms with Chinese government officials, and finances R&D. Enterprise Ireland has also put up initial capital for venture investment funds and supports research and development at private companies and universities.

However, there is something interesting about the Irish tax rates. While corporate taxes are at a very low 12.5%, the income tax is 20% for the first $50000 and 41% on income above that. There are value-added taxes of 21 percent levied on all goods and transactions, with the exception of health and medical services, children’s clothing and food. While the corporate taxes are very low and are aimed at boosting private investment, the remaining taxes appear to be on the higher side.