'Tax breaks key for inward investment'
Speaking at a seminar Lord Bhattacharyya of the University of Warwick said the ability to compete on tax rates was important for a successful economy.india Updated: Feb 14, 2006 18:50 IST
Tax breaks are one of the keys to attracting inward investment, the Chief Executives' club at Queens University Belfast has been told.
The issue was raised by Lord Bhattacharyya, Professor of Manufacturing at the University of Warwick, who acts as adviser to companies, governments and organisations around the world.
While answering questions, at the annual Sir Bernard Crossland lecture which was held at Queen's last week, Lord Bhatttacharyya was asked to elaborate on the point he had made that the ability to compete on tax rates was an important factor in building a successful economy.
In response, he said that the chief factors hindering inward investment in any country were over-regulation and high taxes. He referred to the success enjoyed by his native India and said one of the factors had been a corporation tax rate of 8 per cent.
The professor made clear that while innovation and the other ingredients of a knowledge-based economy were important, tax and the regulatory regimes were crucial. He also observed that companies had to be profitable before they would benefit from a reduction in corporation tax rates.
Lord Bhattacharyya, whose wife is from Ireland, said the republic had benefited both from its low corporation tax regime and from being less regulated than Northern Ireland. In response to Leslie Morrison, the chief executive of Invest NI, who asked about the development of the province's manufacturing sector, the professor said Northern Ireland should follow the example of the republic.
"Look at your neighbour," he said. "Look at what's happened in Ireland over the past ten years and copy it."