Ireland not being 'bullied' into changing tax rate, claims Finance Minister

Ireland's refusal so far to join the OECD's global tax alignment is, according to Paschal Donohoe, "testament to his commitment to protecting our rate and protecting our national interest". Photo: Leah Farrell / RollingNews.ie

Ireland is not being "bullied" to change its tax rate, the Finance Minister says.

Paschal Donohoe will today launch a public consultation on the OECD's global tax alignment, which would see rates set at a minimum of 15%.

Ireland has thus far declined to join the agreement, with Mr Donohoe telling Claire Byrne on RTÉ radio that this is "testament to his commitment to protecting our rate and protecting our national interest".

Mr Donohoe later told Pat Kenny on Newstalk that Ireland was not being "bullied" into changing the tax rate. He said that the change of the rate and other measures in the global tax deal would account for around €2bn in lost tax income, but that this had been "baked in" to financial planning.

Mr Donohoe said that US Treasury Secretary Janet Yellen has signaled her desire for Ireland to sign up to the plan and said that this had made things "difficult" for Ireland. However, he said that he was committed to Ireland's 12.5% rate and that the OECD plan is still "unclear".

(Ms Yellen) does want Ireland to take up the rate, and she's very clear about that, but I've also explained publicly and in the meetings that I've had with Secretary Yellen, that that is something that is phenomenally difficult for Ireland.

"All I can do with this point, again, is indicate what I've done over recent weeks, which is the very fact that I've decided that Ireland cannot be in this agreement at the moment, and that is a testament to my commitment to protecting our rights and protecting our national interests.

"There's still so much in (the plan) that is unclear. The rate is referred to as at least 15%. There are many different issues within the current draft agreement of moments that refer to at least and that is ambiguous. 

"Those areas also include really fundamental issues regarding where taxes are paid, and how it is collected."

Meanwhile, when asked about AIB's decision to close 15 branches, including six in Cork and six in Dublin, Mr Donohoe said that while it was a "great disappointment", the Government is not involved in commercial decisions of the largely State-owned bank.

He said that he hoped to change the economy over the next 18 months by gradually unwinding Covid supports.