Examination of Witnesses (Questions 1-19)
MR VINCENT
SHERIDAN, MR
EAMONN DONAGHY
AND MR
BRIAN KEEGAN
27 FEBRUARY 2008
Q1 Chairman: Mr Sheridan, could I welcome
you and your two colleagues. Before I ask you to say something,
could I just make it plain first of all that we are delighted
to see you and, secondly, that we are seeing you at your request,
and the Committee at the moment is embarked upon a very important
inquiry into aspects of policing in Northern Ireland and this
is very much a one-off session. We have had requests from others
as a result of acceding to your request but the Committee will
deliberate when it has heard your evidence and had a chance to
assess it as to whether we think it is appropriate for us to take
this matter further or not. The commitment we made was to see
you, which we are delighted to do, and that is what we are here
for this afternoon. The House is engaged in a debate on the European
Treaty, as you know, and there will be votes shortly after quarter
past four, so I would like to feel that we can complete our evidence
by then at the latest and we may finish a little before that.
Would you like to introduce your two colleagues, Mr Sheridan,
and then I believe you would like to make a short opening statement?
Mr Sheridan: Thank you, Chairman.
I am Vincent Sheridan, the current President of the Institute
of Chartered Accountants in Ireland. On my left is Brian Keegan,
who is the Executive Director Tax in the Institute, and Eamonn
Donaghy, on my right, is the Chairman of the Northern Ireland
Tax Committee of the Institute. If I may then, Chairman, make
a few opening remarks. First of all, I do thank you and your colleagues
for the invitation to give evidence on behalf of the Institute
of Chartered Accountants in Ireland in relation to the Varney
Review of Tax Policy in Northern Ireland. As an Institute we represent
over 17,000 accountants operating in both Northern Ireland and
in the Republic of Ireland. The only banner that we carry is that
of promoting economic development and sustainable employment and
prosperity on the island of Ireland. As an Institute, we believe
that we have made a significant contribution to the so-called
Celtic Tiger of economic growth in the Republic of Ireland over
the past 15 years. We fully support the introduction of a reduced
tax rate in Northern Ireland of 12.5 %. Our support stems from
our first-hand experience of its effect in the Irish economy.
Sir David Varney was quite right to say that there was more to
economic development in the Republic of Ireland than the tax rate—issues
like the availability of a well-educated and skilled workforce,
a stable and supportive pro-business culture, enormous goodwill,
particularly in the USA, a sophisticated legal and regulatory
environment, membership of the European Union, an English-speaking
environment and reasonable communications and transport infrastructure.
All these and more play their part, Chairman, but all are also
present in Northern Ireland. However, low corporate tax rate provides
the vital stimulant for foreign direct investment to choose Ireland
ahead of other destinations with many similar attributes. Make
no mistake, ladies and gentlemen, it is foreign direct investment
that is the key to economic development in Northern Ireland and
the means by which reliance on public sector employment and subsidies
from other parts of the UK can be replaced by sustainable long-term
and better-paying employment in the private sector. Clearly there
are technical and administrative obstacles to be overcome, but
these are surmountable, and the prize is worth the effort. The
biggest potential obstacle is the constraint imposed by the European
Union state aid prohibitions, and we are delighted that Sir David's
report agrees with our submission that this barrier does not exist.
There is a potential for loss of revenue from the proposed rate
of corporation tax. Sir David in his report put this at approximately
£280 million. We do not necessarily agree with the formula
used, we think it will probably be lower than that, but even if
it was this figure we would point out that this represents only
4% of the current level of UK subsidies going into Northern Ireland.
However, we are extremely confident that any so-called loss of
revenue would be replaced by higher income tax, VAT, capital receipts,
and lower levels of social welfare and other dependency contributions.
Indeed, we see no reason why the experience of the Republic of
Ireland, ie that higher corporation tax receipts followed a reduction
in the rate, would not be followed in Northern Ireland. We note
that the Review does not fully explore the possible beneficial
effects of other forms of tax incentive to help redress the economic
imbalance within Northern Ireland which all commentators, including
Sir David, have identified. We are clearly of the view that alternative
tax incentives are very much a sub-optimal solution. They do not
come near a reduced rate of corporation tax, but we would acknowledge
that it is clear that even some specific tax incentives that do
not impact on the main rate of corporation tax would be of some
benefit to the Northern Ireland economy as it tries to compete
in the global quest for foreign direct investment. Overall, while
the Varney Report cogently identifies the challenges, it actually
offers little in terms of solutions. A more proactive approach
is required which builds up the potential of a Northern Ireland
economy—and the importance of the Northern Ireland economy
was actually noted in the Review. The case for a reduced rate
of corporation tax in Northern Ireland has been strengthened by
this report, not weakened even though the conclusions were non-supportive.
Chairman, the policy arguments have disappeared; they do not hold
up. It is now clearly a political matter and we would call on
the Government to seize the opportunity today to invest in Northern
Ireland and in the medium to long term give Northern Ireland a
chance to reduce its dependency on direct subsidies in order to
secure sustainable long-term development. Thank you.
Q2 Chairman: Thank you for that,
it was a very precise and clear statement and I am grateful for
it. Before I embark on the main question, could you just clarify
a few small points. You said that you represent 17,000 accountants
in the island of Ireland. How many of those are in fact from the
North?
Mr Sheridan: I think it works
out at about 4,000 or 5,000 in the North and the balance in the
Republic.
Q3 Chairman: Yes, and you yourself
are?
Mr Sheridan: I am in the Republic,
I am resident in Dublin.
Q4 Chairman: But you are doing a
good neighbourly act by leading this group this afternoon?
Mr Sheridan: I would not call
it neighbourly in the sense that we are a Northern Ireland Institute.
The Institute of Chartered Accountants represents accountants
right across the island and I would think that next year's President,
who will be from Belfast, would appear before a committee such
as this in Dublin if called upon.
Q5 Chairman: The other two gentlemen
are both from Northern Ireland?
Mr Sheridan: Brian is the Director
of Tax for the Institute and he actually resides in Cork which
is even further south. Eamonn is Chairman of the Northern Ireland
Tax Committee and resides in Northern Ireland.
Mr Donaghy: Chairman, I can confirm
that I am from Belfast.
Q6 Chairman: That at least is a relief,
I thought we were about to become an international committee but,
anyhow, thank you very much indeed for clarifying that. Of your
members then, roughly 4,000 or 5,000 are from the North and the
rest are from the Republic, but you work as an all of Ireland
body and you have sub-committees presumably in Belfast?
Mr Donaghy: That is correct.
Q7 Chairman: And you are content
being from Northern Ireland in saying that the North is properly
and fully represented in the Councils of this organisation?
Mr Donaghy: Absolutely, I think
that the all Ireland Institute of Chartered Accountants (which
predates 1921 and the partition) has been one of the founding
organisations in terms of economic co-operation North and South
and very much it is representative of all its members. As I think
the President said, next year's President will be from Belfast
and on the basis that our Council is fully representative of all
our members, I am very happy that this organisation is representative
of all our members in the North.
Q8 Chairman: I would just say that
the Committee pays regular visits to the Republic and we are delighted
in the increased co-operation on many fronts that we see in our
visits, so you are extremely welcome. I leave it to you, Mr Sheridan,
to field the questions as you choose. I will direct them to you
but if you wish Mr Donaghy and Mr Keegan to take some, that is
up to you. How would you describe the current state of the Northern
Ireland economy and what are the main challenges, in your view,
the economy faces?
Mr Sheridan: I will give my overview
and then pass over to Eamonn who has more direct experience. The
stability that has come to Northern Ireland as a result of the
political agreement has been tremendous and clearly was a first
essential in seeking to get economic development. That is a quid
pro quo, but economic development will not necessarily follow
automatically from that, and this is our particular concern as
an Institute. We believe that a lot more has to happen. We believe
that political policy decisions have to be made. There are an
awful lot of the features that I mentioned present in Northern
Ireland—a well-educated workforce, sophisticated legal and
regulatory environment—that are present in the Republic,
but it is our very firm view in, and having lived through it I
can attest to this personally, that foreign direct investment
is the key to economic growth. The presence of a low tax rate
was vital to securing that in the Republic. Given that Northern
Ireland shares a land border with the Republic, it is very difficult
to compete for foreign investment against the Republic of Ireland.
I would say, though, that I think that there is a huge dividend
to be garnered not only from Northern Ireland as a result of what
we are lobbying for but also for the Republic. I think that the
concept of a Northern Ireland economy is a huge rebirth for the
entire island, and indeed I would say for the rest of the UK,
because there are two things that one is immediately struck by
in terms of the Northern Ireland economy. One is the amount of
subsidies that are required from the UK, and if they can be reduced
I think there is a win-win situation for the entire UK. Secondly,
when you get down to employment in Northern Ireland, the proportion
of the workforce that is employed in the public sector does not
appear to us to be a healthy sign of an economy. The more we can
get the private sector on board the better, and hopefully then
the situation that exists now, where the average rate of pay from
employers in the North is about 70% in that of the rest of the
United Kingdom, the rising tide would lift that very important
statistic.
Mr Donaghy: Chairman, I would
like to echo something of what the President said. The Northern
Ireland economy is a difficult animal to summarise in a short
period of time. However, I think looking at some headline statistics
could give a misleading view. The record employment rates that
are in Northern Ireland at the minute would give the impression
that the Northern Ireland economy is very buoyant and very strong.
I think that there are a couple of key issues that can be masked
by that statistic. Firstly, there is a huge level of economic
inactivity from a large number of people who are currently claiming
benefits, people who have never got into the workplace and who
are incentivised effectively to stay out of the workplace. The
lack of private sector investment into Northern Ireland means
that it is difficult for those people to be incentivised to leave
that economic inactivity. I think also the amount of public sector
finance that has been introduced into Northern Ireland, and the
growth from the public sector purse over the last number of years,
has made a very significant impact into the Northern Ireland economy.
I hate introducing statistics but the one that grabs me is that
61% of Northern Ireland GDP comes from the public sector. I think
that is both unsustainable and unhealthy. As public finances start
to tighten over the next number of years as anticipated, the question
I would have to ask is how are we going to replace that lost economic
activity and the answer must come from the private sector. The
private sector needs a stimulus in order to grow and to develop,
so from that perspective it is difficult to put a shape on it,
but I do believe that the economic future of Northern Ireland
is something that is currently unsure and potentially unstable
and something that a reduced corporation tax rate would help to
bolster and develop.
Q9 Chairman: But putting that on
one side for a minute—and I accept your strong views on
that—both the United Kingdom Government and the new Executive
in Northern Ireland are taking steps to try and overcome some
of the challenges that you have referred to, and to create incentives,
and in particular we are having our minds increasingly focused
on this major Investment Conference that is to take place at the
end of the first week in May. How would you as professional accountants
assess a) the success of the Executive and the UK Government in
the steps that they are taking and b) the potential for this Investment
Conference in May?
Mr Donaghy: I certainly welcome
greatly, as does the Institute, the Investment Conference in May.
I think the bringing of US multi-nationals to the shores of Northern
Ireland to look at Northern Ireland as a potential place for investment
is absolutely to be welcomed. Certainly all the other stimuli
that are being looked at in terms of increased training and increased
facilities and increased infrastructure also have to be fully
welcomed. I would ask Brian maybe to comment on the impact in
the South of Ireland. I think there is a misapprehension that
if we get a low corporation tax rate that will be fantastic and
that is all we need. I would refer to the reduced corporation
tax rate as maybe the "X Factor" in terms of being able
to ignite the growth that potentially could happen. It is that
stimulus certainly in the foreign direct investment world that
is required to bring together all the other issues that are being
looked at.
Q10 Chairman: But you are not going
to get this reduced corporate tax in the short term. You are quite
legitimately campaigning for it and you are hoping to elicit the
support of this Committee in that campaign, and that again is
entirely legitimate, but in the short term you are not going to
get it. You are not saying to the Committee—or are you saying—that
the potential for the conference in May, if the other measures
are being taken, will be negated by a failure to reduce corporation
tax? You are not saying that, are you?
Mr Donaghy: I think "negated"
would be too strong a word. What we will try and do is find a
way of optimising the potential from the conference. I agree that
it is fantastic to get the economic superpower that the US is
to come and think about Northern Ireland, but maybe my colleague
Brian can give you a perspective as to the type of things that
will be on a chief executive officer's shopping lists. When comparing
the Republic of Ireland and Northern Ireland as two potential
locations for foreign direct investment, we believe that a lot
of the items on that shopping list would be similar if not identical.
However, there is one very important piece that is missing from
that shopping list, as we referred to earlier, the X Factor, the
idea of being able to go and say to a CEO, "Yes, we can compete
with other jurisdictions especially the Republic of Ireland with
a 12.5% rate so do not make your decision based on tax; make your
decision based on other economic factors."
Q11 Chairman: Your fear is that having
come to Belfast to enjoy the hospitality and scenery and all the
rest of it, they will then go and invest in the South? That is
your fear, is it?
Mr Sheridan: Chairman, if I can
just address that. I think there is absolutely enormous international
goodwill towards Northern Ireland in particular because of the
history of problems and the fact that now there is a new beginning.
However, I absolutely and sincerely believe that the economy is
going to face a huge uphill battle in turning that goodwill into
positive decisions when it comes to final decision time to invest
abroad. The first decision that an international company makes
is whether they go abroad and then they think where. They will
certainly look at Northern Ireland, but to make that final decision
my own belief is that it is going to be an insurmountable task
for any serious investment unless there is a competitive rate
of tax with the rest of the island. I think that is the political
challenge.
Q12 Chairman: Did you want to come
in Mr Keegan?
Mr Keegan: If I could just make
the observation, Chairman, the very fact that there is an Investment
Conference clearly is to be welcomed, but it does say something
about the status of Northern Ireland in terms of the agenda for
the FDI decision-makers. I do not think that should be overlooked.
My colleagues have argued that 12.5% is key to the FDI decision-making
process but there is a marketing aspect to that as well. It puts
the region right up at the top of the decision-makers' agenda,
and certain regions in the world have already been branded as
potential destinations or potential locales for foreign direct
investment. We feel it will take more than an Investment Conference
to imprint on the minds of the FDI decision-makers that Northern
Ireland is one of the key target destinations. We very much welcome
the initiative but we feel it is a step forward rather than perhaps
a compelling solution to the FDI decision-making process.
Q13 Chairman: One final question
from me, and I want to go to Lady Hermon and to Mr Wilson. You
are speaking here for a body which has the majority of members
in the South. Is there a unanimity within your Institute for the
line that you are arguing, bearing in mind the extra competitive
power that the North would then have vis-a"-vis the South?
Mr Sheridan: We have not gone
to our members seeking a plebiscite, Chairman, but I believe there
is total unanimity. We have, as Eamonn pointed out, a very representative
Council (which is the governing body of the Institute) and the
Council are totally behind the support that the Institute has
given. This has not been just in respect of today. The Institute
has been involved in this campaign for some considerable time,
so total unanimity in our Institute would be my view. There are
opportunities for the Republic. I think that it would create a
new dynamism for the all-Ireland economy. Do not forget that foreign
direct investment into Northern Ireland will include direct investment
from the Republic. The Republic now has become quite a large overseas
investor in the US. There is greater investment going into the
US from the Republic of Ireland than there is from Germany into
the US. I think the Republic of Ireland is now the fourth largest
investor in the United Kingdom. There is opportunity on both sides
of the border, but I think we will be a better Ireland if there
is a developing economy in the North.
Chairman: Thank you very much indeed.
Lady Hermon wants to come in briefly on this point and then I
want to bring Mr Wilson in on the next section.
Q14 Lady Hermon: Could I invite our
witnesses this afternoon to be a little bit more specific here.
You have talked about foreign direct investment. Could I ask Mr
Donaghy because he is Belfast-based, when this wonderful conference
does take place at the beginning of May in Belfast, specifically
and ideally what types of foreign direct investment should be
coming to Northern Ireland? What would you expect to see ideally
coming from the Republic of Ireland and investing in Northern
Ireland?
Mr Donaghy: I think in today's
world the concept of bringing in heavy manufacturing or a manufacturing
base has passed. I think the move towards Asia and India has meant
that is not going to happen. I think the way forward is based
on the likes of intellectual property and telecommunications software.
The idea would be to try and attract organisations to come to
Northern Ireland to act as a central European hub, on the basis
that what we are looking to try to achieve is to get organisations
to come to Northern Ireland wanting to make profit, as opposed
to organisations coming to Northern Ireland and wanting to spend
money. Grants, subsidies, all the stuff that has been used over
the years, both in the South and in the North, absolutely do have
an attraction, but I think there is the encouragement to spend
as opposed to the encouragement to generate profit. The type of
organisations we would be looking to bring in would be the ones
that we would hope would locate here and potentially do their
development in Northern Ireland, with the objective of retaining
a significant chunk of the profits derived from those activities
in the North, and then we would still get the tax at 12.5%.
Q15 Lady Hermon: How influenced would
those types of industries be by our corporation tax, particularly
in light of the fact we have two very good universities, the intellectual
property and the skills base to meet that sort of demand? How
influenced would they be by a lower rate of corporation tax?
Mr Donaghy: Maybe Brian will give
you a comment on how that has worked in the Republic of Ireland.
I rather suspect that over the last ten years, when the type of
FDI that we are talking about has been looking to locate in Europe,
political instability has not helped Northern Ireland's cause
but when one looks at the amount of investment that has gone into
the Republic of Ireland and the investment that has gone into
Northern Ireland, given similar educational establishments, given
a similar hard-working English-speaking type of population the
question is why has virtually all of that gone to the Republic
of Ireland and very little in comparison gone to Northern Ireland?
Our belief is that the tax rate has been a significant influencing
factor in these investment decisions.
Mr Keegan: If I can just make
an observation in regards to Lady Hermon's question. This is borne
out of having trained in an international accountancy practice
and having dealt with FDI projects. The kind of investment that
we are looking for—high tech, high value-added, intellectual
property-based type projects—originate largely in the United
States. The parent companies are predominantly US based and I
make this as an observation rather than a comment. A factor of
the decision-making process within those organisations and that
they regard corporation tax as a cost to business rather than
as a levy on profits. In my experience of speaking to members
who are involved in FDI projects, this really ranks very, very
high in the minds of those decision-makers. I think that is a
particular aspect which is worth highlighting to the Committee
today.
Lady Hermon: Thank you.
Q16 Sammy Wilson: You mention, Eamonn,
that a lot of the investment projects have gone to the Republic
in the past, and I asked the question why they were not coming
to Northern Ireland, and in the past was a big factor of course
not the political instability in Northern Ireland, and now that
the political instability has been not completely dealt with but
it is receding, are there not big advantages which Northern Ireland
now has over the Irish Republic such as an available supply of
skilled labour, and we are already seeing overheating in the Irish
economy, the fact that rents on property in Belfast are much lower
than in Dublin, I think it is about a third, if not less, and
that tax incentives probably bring tax rates down to maybe even
below what they are in the Republic. Are all of those things which
Varney has identified not sufficient to offset the plans to bring
corporation tax down to a similar level in the headline rate?
Mr Donaghy: I will take the two
points in reverse order. Firstly in terms of the other incentives
that are available, we have looked at a way of analysing the other
incentives that would be in Northern Ireland and the Republic
of Ireland. That is a very difficult and complex process depending
on expenditure, depending on timing, depending on exactly where
you are going to locate. Unfortunately, large organisations tend
to want to move fairly quickly and they want to be able to do
an analysis of the various countries that they could locate in
to say, "Well, if we stay here for five years we might get
X amount of capital allowances and possibly a bit of research
and development depending on what we spend." Yes, that can
mathematically be worked out but I think that organisations want
to see decision-making based on high-level issues, and I think
the rate of corporation tax is something that can be calculated
quickly and understood by boards of directors and chief executive
officers. I think the other thing to note is that in 1995 the
concept of Ireland being a low tax rate jurisdiction was not unheard
of but was fairly novel. I think we have to realise that in today's
FDI world where companies and businesses are very mobile, it is
not just the Republic in town; there is Eastern Europe, Singapore,
Costa Rica where businesses can locate, and therefore this is
not just Northern Ireland competing against the Republic of Ireland;
this is Northern Ireland in the big bad world of foreign direct
investment trying to make its case. Certainly if Ireland were
looked at, you are absolutely right, there are lots of advantages
in Northern Ireland compared to the Republic of Ireland, but if
Northern Ireland is not on the shortlist in the first place because
of its tax rate, then unfortunately those differences and those
advantages that Northern Ireland have may never get looked at.
Q17 Stephen Pound: Are you talking
about back office relocation or primary plant?
Mr Donaghy: What we would ideally
like to see is more than just back office.
Q18 Stephen Pound: Is that the sort
of structure you are talking about in countries like Costa Rica?
Mr Donaghy: In many ways it is
difficult. Costa Rica has made a niche market for itself in terms
of research and development and back office. Any investment into
Northern Ireland is going to be welcome but what we are looking
for is sustainable, long-term investment where companies want
to locate their profits as opposed to just necessarily reducing
their costs.
Mr Keegan: Just one supplementary
point if I might. You are absolutely right, Mr Wilson, in terms
of labour costs there are advantages and in terms of rent rolls
there are advantages. What we would love to see in Northern Ireland
is highly profitable businesses, so if you have got an FDI company
making profits of £100 million, which is not unheard of,
with a rent roll of maybe £5 million year and staff costs
possibly in the region of £30 million, yes, the advantages
are there, but if you are looking at the tax differential on the
profit of 100 million, which amounts to 15.5%, those very strong
advantages, which we fully accept are there, economically are
completely wiped out.
Q19 Sammy Wilson: This is where I
am at a bit of a loss to maybe follow all that you are saying
because while you are saying that the main stimulus was tax, Varney
in his report indicated—and as an economics teacher I used
to teach about ceteris paribus, all other things being
equal, and everything else—that during the period when a
lot of this foreign direct investment was being attracted to the
Irish Republic the tax rates actually went up from 0% on firms
which were exporting more than 50% of their output to 10%, and
then to 12.5%, so therefore he did not believe that the tax stimulus
was the major factor, and he pointed to all of the other things
such as the supply of skilled labour, English speaking, European
Union help with infrastructure, et cetera. So on the one
hand you are saying it is absolutely essential and on the other
hand Varney is saying it is not absolutely essential because look
what has happened to tax rates at the same time as all of these
other things. Who is right on that and how do you square those
two arguments?
Mr Keegan: I think, Mr Wilson,
you make a very good point and I think Sir David made a very good
point but he may have overlooked, to my mind at least, what is
a very important issue. If we think about the kind of industries
that were truly mobile in the 1970s and 1980s they were typically
either heavy manufacturing or assembly. The high-tech industries
that we take completely for granted now just did not exist. The
computer industry was embryonic, the entertainment industry has
burgeoned out of all proportion. We had an export sales relief
rate of 0% and we have had that since the mid-1950s, but there
was no mobile business to be attracted in simply because that
was not the nature of the industries in the 1950s and 1960s. It
just so happened that the 10% rate of manufacturing that applied
in Ireland in the 1990s caught a wave of new mobile industry and
new services, particularly high-tech services. Another key area
was the area of pharmaceuticals and osteo/polio aids and medical
appliances where there were enormous technological leaps within
that industry over that period of years. Suddenly those businesses
became truly mobile and it actually made sense to relocate those
businesses closer to a target market in Europe, or for whatever
good commercial reason was there. I am not so sure it was the
fact that those low rates were not working; there were low rates,
but they were not working in an environment where there was a
normal business really in a position to take advantage of them.
We hit it lucky in the 1990s because we had this rate of manufacturing
relief—we called it the 10% rate—and manufacturing
basically meant anything that was employment grant-assisted. Things
that we would not traditionally regard as manufacturing in the
true sense of it, things like software development, things like
some of the service provision that qualified as manufacturing
by virtue of that legislation which said you are grant aided so
you can call it that and everything is fine, would come under
that heading, and that did attract industries. The difficulty
with that though was that Europe said, "This is not on. What
you are doing is effectively you are making up a tax rule which
focuses in on one particular sector." It was at that stage
that we introduced the generalised reduced corporation tax rate.
I make that point first of all. My second feeling on the Varney
Report—and I do not mean to criticise the report because
it is a very good report in many respects—is that one of
the things he missed was when Sir David talks about FDI he talks
about FDI in manufacturing; he does not think in terms of FDI
in services. In fact, services has been the big area where Northern
Ireland has scored particularly in the last ten years and we are
now one of the world's leading service exporters in Europe population-wise.
I think if you factor in those two points it may help, I hope,
to explain the point you raise.
Mr Sheridan: I think it is also
where the opportunity lies and the opportunity lies in services
going forward in terms of foreign direct investment. I am not
so sure that there is that much mobile manufacturing investment
going on, but if it is it is certainly not going to come to these
islands; it will go somewhere else. It is really in services and
I think it is disingenuous in the report to suggest that the rate
goes from 0% to 12.5%. Tax is a relative game so there is no such
thing as an objective tax rate that is good or bad. It is just
there is a tax rate that is a lot more attractive or a lot less
attractive and business, seeking to maximise its return on investment,
will go towards the place where the tax rates are more attractive.
There is no objective basis for it; it is a relative game.
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