IRELAND’S BANKING woes have not damaged the State’s financial services industry, a group of industry leaders insisted yesterday.
Speaking at the publication of a new study on Ireland’s financial services industry, president of IFSC Ireland and former taoiseach John Bruton said the Irish financial services sector was “entirely separate” from the banking sector.
“They are entirely separate from one another. One is externally focused, dealing with transactions that originate and eventuate outside the country but which are handled in the country. The problems of the domestic banking sector are predominantly domestic.”
The IFSC accounts for 7.4 per cent of Ireland’s GDP, according to the study conducted by Accenture for Financial Services Ireland, the Ibec group which represents financial services companies.
The report also highlighted the industry’s contribution to the Government’s tax take. The IFSC contributes €2.1 billion in tax annually, and represents 36 per cent of the country’s total corporation tax income.
Mr Bruton said any change to Ireland’s corporate tax rate would be “counter-productive”.
“The corporation tax policy rate here is something that has been in existence for more than half a century. It is not something that was introduced in order to attract foreign direct investment from other parts of the European Union. It’s a policy that predates our first application to join the EU.”
He said it would not make sense for other countries to demand a change in a tax policy that is a significant source of economic growth. He also pointed out that corporation tax is the only category of tax that has exceeded expectations, coming in at approximately €300 million over target during the first 10 months of this year.
Willie Slattery, chief executive of State Street, said the fact the IFSC has sustained the same number of jobs since 2007 is proof of its resilience.
More than 30,000 people are employed by IFSC companies, according to the report.
Alastair Blair, managing director of banking at Accenture, said payments and money transmission were potential growth areas for the IFSC.
