Government refusing to yield on 12.5% corporation tax rate

The Government has renewed its refusal to bow to European pressure to hike corporation tax.

Both the Taoiseach and Tánaiste shot down claims that French president François Hollande could push for Ireland to increase its 12.5% rate.

“Ireland will support a growth agenda, Ireland will support an investment agenda, but clearly there are issues in there with which we don’t agree,” said Enda Kenny.

“Obviously in the context of changes with the corporation tax rate and localised financial transaction taxes are not in the interests of this country.”

Just hours after Mr Hollande met German chancellor Angela Merkel for the first time to discuss stitching growth measures into the fiscal treaty, one of his advisers unveiled the thinking on tax harmonisation.

His predecessor Nicolas Sarkozy and Ms Merkel, tried to force the issue on Ireland previously, but the Government has continually refused to bend.

Phillippe Aghion said yesterday the new president will seek harmonisation in corporation tax and financial and banking regulation. He told Newstalk that Mr Hollande expects solidarity from members of the eurozone that have signed up to the fiscal treaty.

“There is a view if Europe helps you, you have to help Europe. It’s give and take. So I think we put the idea it would be good to have a minimum amount of solidarity if Europe is to survive.”

Earlier, Eamon Gilmore insisted the position on corporation tax was absolutely firm to ensure Ireland remains attractive to investors. He said it would also boost confidence in the euro and the country as a whole.

Although a line has been drawn in the sand over corporation tax, Michael Noonan, the finance minister, said a Yes vote in the referendum and a commitment to ratify the fiscal treaty would send a positive signal to Europe that Ireland is serious about repairing the economy.

Mr Noonan drew laughter during a Bloomberg Ireland Economic summit when he gave his analysis of the limited economic links between Ireland and Greece, and the impact the latter’s leaving the eurozone may have.

“Apart from 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?”


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