Budget 2027 should set out a “clearly defined funding stream” for improvements to Ireland’s national electricity grid if the Government wants to continue to attract US companies amid the ongoing global boom in artificial intelligence (AI) investment, the group representing US multinationals in the Republic has told the Coalition.
Ministers should also consider reducing marginal income tax rates and increasing the thresholds at which they apply to “support talent attraction and retention”, the American Chamber of Commerce (AmCham) Ireland has said.
The lobbying body – which include some of the biggest employers operating in the State, responsible for a huge proportion of Ireland’s corporation and income tax take – made the recommendations in its pre-budget submission to the Department of Finance.
Commenting on the document, AmCham chief executive Paul Sweetman said the budget was being prepared within a “challenging environment, with geopolitical issues driving uncertainty”.
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Against this backdrop, he warned that international “competition for investment, talent and leadership” will continue to intensify.
AmCham Ireland said the Republic’s energy system is “a key facilitator” of inward investment. To remain competitive, the Government must ensure that energy infrastructure “has the capacity” to cater for the “current and future needs” of businesses.
It has recommended that the Coalition builds on Budget 2026, which set aside additional funding for EirGrid and the ESB to modernise the grid. October’s budget should provide for a “clearly defined funding stream for electricity grid improvements”, AmCham Ireland said.
Security of energy supply should also be addressed by advancing legislative measures to develop more wind and solar power to insulate Ireland from “international energy shocks”.
Driven by the rise of AI, data centre demand is booming globally. The Government has sought to capitalise on that trend by lifting an effective moratorium on new data centre connections to the electricity grid, which had been in place since 2021.
Data centres, many of which were built and operated by AmCham Ireland members like Amazon, Microsoft and other so-called hyperscalers, accounted for almost a quarter of the electricity consumed in the Republic last year.
The sector is expected to place even more of a strain on the energy grid by the end of the decade, accounting for more than 30 per cent of Irish energy consumption.
Separately, AmCham Ireland said its members have cited the availability of skilled and educated labour as the Republic’s greatest competitive advantage.
The body said Minister for Finance, Simon Harris should address “the personal tax burden on employees to support talent attraction and retention in Ireland through a reduction in the marginal income tax rates and [increases in] the thresholds at which they apply”.
Increases to the standard rate band and personal tax credits are widely expected to form part of the Coalition’s budget day package. The Government may also look to reduce the top marginal rate of tax on income of more than €44,000, when PRSI and the universal social charge are included.
Economists, however, have warned that reducing income tax in an inflationary environment is likely to fuel further consumer price increases and deepen the exchequer’s dependence on corporation tax receipts.
