Entrepreneur and philanthropist Sir Tom Hunter has called for UK corporation tax to be cut across key sectors in a bid to draw high-value investment.

It comes as an Oxford Economics report published today titled Lessons from Ireland for Scotland’s Economy, A Paper for the Hunter Foundation, reveals a key factor of Ireland’s economic transformation has been low corporation tax.

In a foreword to the report, Sir Tom said that Ireland drives foreign direct investment with multiple incentives, “not least a 12.5% corporation tax rate moving to 15% in 2025”.

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He said: “In 2021 this drove 249 such investments compared to Scotland’s 122.

“The other key component – aligning education to economic development; per 1000 of population 39.9 were STEM graduates compared to Scotland’s 20.9.

"From 2012 to 2022 Ireland’s GDP grew on average 8.9% per annum compared to Scotland’s rather anaemic 0.9%."

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Sir Tom continued: “They are home to nine out of the top ten pharmaceutical companies in the world and fourteen of the fifteen top medtech companies … and recently the Irish Government forecast a staggering €65bn surplus over the next three years.

“So how does Scotland compete on global investment opportunities when faced with that challenge?

“If Scotland were a business it would be a small business and that’s to our advantage; we can focus, be agile and compete.

“Sure we can point to a beautiful place to live and work, wonderful universities and one of the highest tax regimes in Europe with the added burden of Brexit to contend with, or, we can do something about it.”

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While corporation tax is UK reserved, Sir Tom said both the Scottish and UK governments have a role to play. The report said that, in October 2021, “almost all OECD governments, including those of Ireland, the UK, and the US, agreed to an outline for new tax rules, providing for a minimum corporation tax rate of 15%”.

It continues: “However, at present the corporation tax rate across the UK is 25%, which means there is clearly scope within international agreements for that to be cut significantly.”

Sir Tom said: “So here’s my suggestion to Holyrood and Westminster – make all of Scotland a 15% corporate tax zone for three key global growth sectors: renewables and low carbon manufacture and services; life sciences and medical technologies and software, big data and AI.

“The Irish experience tells us we will net more tax, more jobs and more value from this highly focussed approach with one agency delivering that approach than we will with our current strategy.”