Lisbon Treaty has nothing to do with our corporation tax rate

IN his letter (April 24), Brian Geoghegan tries to contend that the Lisbon treaty will bring about common corporate taxes in Europe.

As a member of the economics committee of the European Parliament, I can assure readers that tax harmonisation is not on the way in Europe.

For Mr Geoghegan to argue that our low level of corporation tax distorts competition is a fallacy. EU member states are free to set their own corporation tax levels. The Cypriot level stands at 10%, which is even lower than the Irish rate.

The EU cannot take any decisions over taxation rates unless it is with the unanimous agreement of all 27 member states. European Commission president Jose Barroso was very clear on this specific issue when he was in Dublin recently.

For Mr Geoghegan to say the British government will use the Lisbon Treaty to redress our corporation tax regime does not stand up to scrutiny. The British government is totally opposed to common corporate taxes in Europe on the grounds that tax decisions are sovereign matters for individual EU member states to deal with themselves. Mr Geoghegan further states that a yes vote will result in lower levels of inward investment into Ireland.

Yet Paul Rellis, who is both the president of Microsoft Ireland and of the American Chamber of Commerce in Ireland, has stated that a no vote would result in lower levels of inward investment from the US.

Does anybody really believe all the main political parties in Ireland and leading business groups such as IBEC, the Small Firms Association, the IDA, the Dublin and Cork chambers of commerce and American multinational companies located in Ireland would call for a yes vote if for one moment this treaty would negatively affect our existing corporation tax structures ?

Our low corporation tax regime has been a key factor in generating economic growth and prosperity in Ireland. The reality is that the Lisbon treaty has nothing whatsoever to do with a common consolidated corporate tax base

The German ministry of finance carried out a report this year — via the European Centre for Economic Research based in Mannheim — to look at the viability of common corporate taxes in Europe. This centre reported that common EU corporate taxes were not feasible, were unworkable and were politically undesirable. That said, I have consistently said this is a matter that will always require vigilance. There are at least 10 countries in Europe opposed to a common corporate tax base, with many others playing a wait-and-see game.

The question has to be asked should I vote yes or no for this treaty because there is a working group in Europe looking at the feasibility of this issue. The answer is that there have always been issues of concern to Ireland within a European context. We need to address these issues in Europe from a position of strength and not from one of weakness — whether it relates to structural fund negotiations, euro zone entry, etc.

Eoin Ryan MEP

43 Molesworth Street

Dublin 2