Libertas: Treaty threatens our corporate tax regime

ANTI-Lisbon treaty group Libertas yesterday claimed Fine Gael and Labour “simply could not be trusted” to defend Ireland’s business tax regime which has proved so beneficial to the economy.

Ireland will retain its veto on tax issues if the Lisbon treaty is passed, meaning it can reject any move to harmonise tax rules or rates.

But Libertas believes the treaty will “open the back door” to a common consolidated corporate tax base (CCCTB), if passed.

It says that under “enhanced co-operation” procedures in the treaty, a group of member states could come together to introduce a CCCTB in their own countries. Under such a system, the same rules would be applied in each participating state to calculate the tax a company owes, the goal being to reduce red and encourage businesses to invest in those countries.

Ireland would not be obliged to participate, but Libertas believes a CCCTB in another region of Europe could put pressure on Ireland to adjust its tax regime. And the group yesterday claimed Fine Gael and Labour MEPs had already shown willingness to support such CCCTBs.

Libertas cited a 2005 European report advocating a CCCTB supported by all Fine Gael and Labour MEPs, with the exception of FG’s Gay Mitchell. Fianna Fáil MEPs did not vote in favour of the report.

Mr Ganley claimed the voting record of the Fine Gael and Labour MEPs “completely belied any credibility” the two parties had on the issue of taxation.

“The same people who preach about the importance of a yes to Lisbon vote have gone over to Brussels and betrayed their constituents in the most shameful manner,” he said.

Both Fine Gael and Labour described Mr Ganley’s claims as “groundless”.

Labour spokesman on European affairs, Joe Costello, said: “It was [Labour’s] Ruairi Quinn as Minister for Finance who negotiated the 12.5% corporation tax rate on behalf of the rainbow government in the mid- 1990s. Each Labour leader since has reaffirmed the party’s commitment to retaining the 12.5%.

“Libertas neglects to tell the public that the Bersani Report, on which it bases its claims, specifically acknowledged that corporation tax rates were a matter for individual states.”