Impacts of the UK imports reductions on Ireland
The Brexit decision by the UK to leave the EU and focus and work as a single market entity proves to be a cause to many impactful consequences to the Republic of Ireland. This consequences are extensive in regards to the economy, income policy and the regime. The British move from the organization is a foreseen problematic relation with Ireland.Both nations joined the EU in 1973, it had forged excellent diplomatic relations between the two countries. The UK is one of the biggest business partners with Ireland, and this exit may amount to problematic consequences in Ireland. This paper takes an insightful look at the impacts of the reduced exports measures by the UK to reduce imports and their effect on the republic of Ireland.
Impacts of UK reduced exports to Ireland’s economy
It is knowledgeable that the UK is a major market for Irish exports contributing to 13% of Irish exports and approximately 25% of all exports. Brexit move will do considerable damage on Irish markets due to shifts (Lawless, 2020). Furthermore, it is the expectation that the country, outside the conformity of EU will immensely restrict free trade with the country and impose restriction considering the past relationship between the two countries. However much the EU may contribute to avert this issues, it is impossible to engage the relation between the two countries especially presently (Wordin, 2018).
On economic impacts, the reduced exports would mean reduced demand for Agri products from Ireland. It is expected that a 40% decrease in exports would be incurred from this reduction (Copenhagen Economics., 2020). This is a dire consequence that will force a shot in the Irish economy and affect its GDP. This particular case of reduced exports is undeniably a restricted policy set by the UK. This will results in decreasing prices for Irish goods due to the issues aligned with border and migration (Wordin, 2018).
This restriction will result in an imbalance in the Irish economy contributing to increased unemployment due to migrations policies. This consequence will be, increased unemployment rates and subsequently reduced wages limiting the purchasing power of many Irish citizens (Wordin, 2018). In addition to this, Ireland is highly dependent on the UK for logistics and supply chain. It has been s fundamental partner in Irish goods across other global markets. With these measures on exports from Ireland and other countries, the routes aiding Irish markets will be forgone or substantially ineffective. It is expected from the Brexit that the Irish economy will ensure progressive losses in GDP ranging between 3-7% by 2030(Copenhagen Economics., 2020).
Impacts of UK reduced exports on Irish income tax policy and regime
The resolve by the UK to reduce imports will have an immense effect on the Irish income policy. After the Brexit, it was clear that Britain would no longer engage in free trade not conform to the unitary EU policies. Therefore, this meant that all trade would be taken as exports and imports. Regarding the reduced imports to the UK, the customs policies may be overwhelming to the Irish economy. As opposed to free trade, exporting goods to the UK would involve even much scrutiny the will enforce more compliance costs on Ireland (Wordin, 2018).
Furthermore, the exchange of talent is highly compromised by this resolve by the country. With restrictive measures on immigration such as visa, most individuals seeking to work in the UK will be grounded in the Irish markets contributing further to the country’s continued loss in GDP. The Irish regime will be faced with fundamentally many problems in regards to relations with the UK. The EU kept the leash on the two countries. With these changes ongoing in the UK, it is the expectation that the border problems and the past issues with Northern Ireland would resurface (Wordin, 2018). These issues will be a backlash to the Irish economy as the partnership with the UK served to enhance the countries in many interval ways.
However if the guidelines stipulated by the EU are adhered to regarding the Ireland/Northern Ireland border, it is notable the extreme consequence of this trade restrictions will be considerably lenient on the Irish income tax policy due to the UK agreement for Northern Ireland to participate in certain single market activities and conform to EU standards(Sargeant,2020 ).. The move by the government will influence the FDI into the country. This serves as an advantage in regards to the country. With reduced imports into the UK, there will be an expected imbalance that will push dissatisfied companies to seek relations with Ireland and other EU members. This will contribute to a marginal economic balance in Ireland.
Income tax policy changes in Ireland
In order for the Republic of Ireland’s economy to maintain its integrity in the markets. There are few suggestive ideas towards employing certain changes to the income tax policy.in this particular case, there is need to highlight the consequences of the UK imports reductions to the country. This impactful consequences include reduced imports to the UK, reduced flow of talent within the countries under immigration, the ineffectiveness of Irish trade routes reliant on the UK and possible increased FDI investments (Kelly et al, 2016.)
The Irish income tax policy would involve disengaging fronts from normal international trade conduct and seeking new elaborate forms to increase income tax. For the country to be able to improve its income tax policy, it should take into consideration the available local strengths in its economy (Kleven et al, 2016). With this taken into consideration, the country will find essential platforms to avail the required Imports from the UK .and also promote internal. Markets. By the equal margin exported to the country, the Irish government should seek extra sources of revenue my engaging in production of goods and services that have a market in other countries within the EU and the world( Kleven et al,2016).. The function will enable to create a solution for the GDP, employment problem and retain its minimum wages at a level place.
The UK reliant trade routes would require immediate action towards making new ones and partnering with other nations that can help lessen the cost succumbed by the country. In this way, they would be able to foster new connections that could provide market for the bulky surplus from disengaged British relationship. This would contribute substantially if not completely to improve the income tax policy. FDI undoubtedly going to increase in the country. Ireland is a country renowned for having favorable tax policies. In order for the government to attract this investors(Wordin, 2018, the government should set out on seeking dissatisfied British based companies to indulge their favorable terms .Furthermore, it will provide economic benefits to the citizens through creation of opportunities.
For the country to keep good relations with northern Ireland and effectively conduct trade with the country, there would be need to ensure the ensure the enforcement of the regulations placed by the EU in regards to border relation and indulge the UK to adhere to them(Symington ,2017). This suggestions would go a long way in ensuring the improvement of the Irish income tax policy and ensure the economic does not depress.
The Republic of Ireland has been on the receiving end of the UK exit from the EU. This has resulted in the former partner becoming and economic adversary that is drowning the capabilities of the country in foreign and local markets. Through the reduced imports to the UK, the country has faced a challenge over the exports of it goods and services to the country. This has resulted to substantial GDP losses and income tax policy issues .This paper identified the economic problems and consequences aligned to this move and offers relevant suggestions towards improving the income tax policy and provide a deliberative effort for the country to engage in better markets and ensure its sustainability.
Copenhagen Economics. (2020). Publications – Ireland & the impacts of Brexit. CopenhagenEconomics.https://www.copenhageneconomics.com/publications/publication/ireland-the-impacts-of-brexit
Kelly, L., &Brennan, P. (2016). The Potential Tax Effects of Brexit on Investors and Taxpayers in Ireland: Deloitte Ireland: Tax. Deloitte Ireland. https://www2.deloitte.com/ie/en/pages/globalmarkets/articles/The-Potential-Tax-Effects-of-Brexit-on-Investors-and-Taxpayers-in-Ireland.htm
Kleven, H., Khan, A. & Kaul, U. (2016). Policy recommendations. IGC. https://www.theigc.org/reader/taxing-to-develop-when-third-best-is-best/policy-recommendations/
Lawless, M. (2020). Brexit and trade on the Island of Ireland. Revue de l’OFCE. https://www.cairn.info/revue-de-l-ofce-2020-3-page-95.htm.
Sargeant .J, (2020) Ireland and Brexit
Symington, M. (2017). Ireland and Brexit: Five things you need to know. Google. https://www.google.com/amp/s/www.aljazeera.com/amp/news/2017/12/13/ireland-and-brexit-five-things-you-need-to-know.
Wordin,A,(2018)”IrelandandtheEconomicImpactsofBrexit,”PepperdinePolicyReview: Vol.10, Article3 https://digitalcommons.pepperdine.edu/ppr/vol10/iss1/3