Taoiseach defends Irish tax regime at global forum

Taoiseach Enda Kenny and Finance Minister Michael Noonan brought their message that Ireland was back in business to the World Economic Forum in Davos, Switzerland.

They also defended the country’s tax regime, proclaiming that Ireland is not a tax haven.

Honoured at being asked to officially open the European markets remotely from Davos, they used the occasion to further pressurise EU colleagues to make good on promises to ease the country’s bank debt.

Mr Kenny was put on the ropes at one of the events yesterday when he was asked by Financial Times editor Lionel Barber if he feared he would be forced to change the country’s corporate tax rate.

Statements from British prime minister David Cameron about “fairness” in corporate tax was also seen as a side-swipe at countries such as Ireland.

But the Taoiseach, well-practised in defending the country’s tax reputation, met the accusations head on and said that Ireland was “not a tax haven for unorthodox practices”.

While describing the tax rates — no longer the lowest in the EU — as transparent, he appeared to touch on the increasingly contentious issue of the “double Irish” by which companies use an Irish base to shift money.

“The tax regime in Europe in general may lead companies to make decisions about their tax,” Mr Kenny said.

His colleague on the forum, Dutch prime minister Mark Rutte, stayed silent, although his country is increasingly coming under focus for operating the “Dutch sandwich” used by companies sometimes in conjunction with the “double Irish” to funnel money out of Europe and into tax havens.

Ireland had been “in a hurricane” for the past few years using 40% of its GDP to pay for banks and private bank creditors. But having a plan, following it, and working with the patience and understanding of the people had yielded results, with the country about to exit the bailout programme and export growth in double digits.

Asked about Mr Cameron’s plan to hold a referendum in five years on Britain’s participation in the EU, Mr Kenny said such a timeframe was “an eternity in politics”, and many issues he raised could be “changed from the inside”.

He said there was a new sense of realism within Europe about the EU — in just two years talk moved from a break-up to a banking union. Leaders, Mr Kenny said, must deliver on their promises and produce growth and jobs with emphasis on completing the single market.

Both Mr Kenny and Mr Noonan were interviewed by major US TV business channels Bloomberg and CNBC. Mr Noonan referred to the list of aids he was hoping to receive from the troika to help Ireland’s exit from the bailout programme, indicating that a credit line of cheap money from the ESM would be useful.

They met representatives from international companies at an IDA-organised event yesterday evening. Today, the Taoiseach will address the Transatlantic Business Dialogue.

He hopes that a report giving the go-ahead to begin designing an EU-US trade agreement will be finalised next month, putting Ireland in the driving seat for the initial steps of creating the biggest free trade area in the world.