Taoiseach, Tánaiste standing firm on tax rate

Taoiseach, Tánaiste standing firm on tax rate

Taoiseach Enda Kenny and Tánaiste Eamon Gilmore have both has insisted Ireland will not budge on its corporation tax rate despite suggestions from Europe it could be put back on the agenda.

The coalition leaders shot down hints that the comparatively low 12.5% rate was up for debate in a sign of solidarity as the eurozone scrambles to stitch a growth stimulus package into the fiscal treaty.

Speaking at a Bloomberg event in Dublin, Mr Kenny said any changes to the country's tax regime would not be in Ireland's interests.

"Ireland will support a growth agenda," he said.

"Ireland will support a development agenda.

"But there are clearly other issues in there with which we don't agree.

"Changes in the corporation tax rate and localised financial transaction taxes are not in the interests of this country."

Mr Kenny said he looks forward to greater discussion on a European stimulus package, when the European Council meets at the end of the month.

"I'm glad that Council President Herman van Rompuy has called a summit meeting for the 23rd, which I would see as the start of a process by which Europe can not just talk about growth agendas, but put propositions on the table for decisions and implementation."

Meanwhile Mr Gilmore said that "as far as Ireland is concerned, our rate of corporation tax is established, it’s not going to change".

The long-running debate resurfaced when an advisor for new French president Francois Hollande, who has pushed for the treaty to be amended to include growth measures, said France may promote a harmonised rate of corporation tax across Europe.

The Tánaiste said Ireland should stick to its rate to provide certainty to potential investors and to ensure growth in the domestic economy.

“We don’t intend to change our position in relation to our corporation tax - that’s absolutely firm,” he said.

“We have to provide certainty to investors by being clear that our rate of corporation tax is not changing and also indeed by passing the stability treaty, so that they have confidence in the euro and confidence in Ireland.”

Mr Hollande’s advisor Phillippe Aghion said that the new president, who was sworn in yesterday, would seek harmonisation across the board – in corporation tax and financial and banking regulation.

He told Newstalk that Mr Hollande expected solidarity from members of the eurozone that had signed up to the fiscal treaty.

Mr Hollande’s predecessor Nicolas Sarkozy made continuous calls for Ireland to raise its corporation tax to be in line with the rest of Europe.

The Tánaiste said he was not surprised Mr Hollande was likely to make a similar appeal.

Elsewhere, finance minister Michael Noonan told the same Bloomberg breakfast briefing that a No vote in the May 31 treaty referendum would be a dangerous leap in the dark that Irish citizens should not take.

Mr Noonan was also asked his thoughts on how a Greek departure from the euro might impact on Ireland.

The minister drew laughter from the invited audience with his analysis of the limited economic links between Ireland and Greece and wider connections.

“Apart from holidaying on the Greek islands, I think most Irish people do not have a lot ... if you go into the shops here, apart from feta cheese, how many Greek items do you put in your basket?” he said.

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