Gilmore: Corporate tax will not be lowered

TÁNAISTE Eamon Gilmore has warned EU ambassadors that the Government will not dilute Ireland’s low corporation tax rate.

But the Labour leader also urged member states to support the need to lower the interest rate on Ireland’s bailout loan.

Mr Gilmore used the meeting with the 26 ambassadors at Iveagh House to try to restore Ireland’s economic reputation.

He said afterwards that any support by member states to lower the 5.8% rate of Ireland’s bailout loan would not depend on adjusting our corporation tax.

He said: “We asked them to communicate to governments our wish that there would be support for the Minister for Finance who is seeking the reduction in the interest rate, which applies to the funding which is coming through the European funds.”

Finance Minister Michael Noonan is likely to discuss reducing the interest rate on Ireland’s bailout loan with his EU counterparts at next month’s meeting of finance ministers.

Mr Noonan has already said that he hopes a lower interest rate may be agreed by June, if French and German concerns are overcome.

Mr Gilmore said a cut of 1% could apply if other national parliaments approve it.

Mr Gilmore said he thought the election of the eurosceptic True Finns party in Finland would not interfere with Ireland’s bid to lower the rate.

“I think it’s important that we don’t attach too much significance to the particular result or the votes that are obtained by any particular party in any election.”

Mr Gilmore said the EU ambassadors were told in no uncertain terms that the corporation tax, which attracts significant foreign investment here, would not be touched.

“We made it very clear that there will be no reduction in the 12.5% corporation tax rate.”

Ambassadors were also told about Ireland’s revised bailout deal with the EU, IMF and ECB and plans to recapitalise the banks, details of which the representatives are now expected to report to their governments.

Ireland’s own heads of missions will be recalled in June for a joint meeting about promoting trade abroad and investment in Ireland, the Tánaiste said.

Mr Gilmore said Ireland now had a “more to do” type of reputation at EU level and efforts were underway to restore the country’s status.