Opening Bell: Higher earners face tax hike, new Pfizer jobs, multinationals dominate Irish R&D

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The Irish Tax Institute has claimed that middle and higher income earners will soon lose a major tax credit.

It follows Finance Minister Michael Noonan's recent comments that he will restrict the PAYE tax credit for earnings over €70,000.

If it goes ahead, some 270,000 workers would see a slice of their income hit with a marginal tax rate of 70%, one of the highest in the western world.

The tax body has said that this would mean Irish employees earning more than €70,000 per annum would be hit with more expensive tax bills than their counterparts in cities such as London, Paris, Madrid and Stockholm.

IDA Ireland has warned that high income tax will deter foreign investment and negatively impact job creation.

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RTÉ has posted a deficit of €2.8 million in 2015.

Having reversed four consecutive recessionary deficits with small surpluses in 2013 and 2014, it has once again failed to break even.

While total revenue rose €6.1m to €334.3m, operating costs climbed €8.4m to €320.3m due to an increase in staff numbers.

In its annual report, the national broadcaster pointed to a €2.6m hit from foreign movements on its sterling and dollar-based costs – including buying in foreign programming – as a major reason for ending up in the red.

Commercial revenue climbed 4% to €155.3m, while RTÉ successfully fended off new competition from the likes of UTV Ireland to see a 2% increase in television advertising and sponsorship revenue.

Though its share of the licence fee climbed €300,000, RTÉ said that in real terms, it is declining.

RTÉ has said:

"Given the general overall improvement in economic conditions and the growth in net new household formations, this was a disappointing outcome."

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Research and development (R&D) in Ireland is chiefly carried out by foreign multinationals with Irish SMEs not getting much of a look in.

According to a new report from the European Commission, multinationals account for over two-thirds of business R&D in the country.

The intensity of homegrown R&D – R&D expenditure divided by sales – is below the EU average.

Intensity was 1.52% in 2014 (the latest year for which figures are available), compared to a 2% EU-wide target.

The report also stated:

"Ireland has implemented measures on innovation procurement much later than other EU countries, also taking into consideration the strength of its high-tech and ICT sectors.

"Nevertheless, Ireland could benefit from a comprehensive strategy to boost innovation procurement."

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Pfizer has announced the creation of up to 350 new jobs in Dublin.

The positions will be made available as a result of the planned multimillion euro expansion of its Grange Castle Campus.

The first phase of the expansion will bring 200 new jobs when it is fully operational.

A further 100 workers will be added following the completion of the second phase.

The US biopharmaceutical company's investment of between €300m and €400m will add over 34,500sq m to its campus, making it one of the largest biotech plants in the world.

According to its Environmental Impact Statement (EIS), "the facility will employ a total of up to 1,450 personnel once fully operational."

 

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