Fine Gael says there is nothing wrong with tax system but also wants to reform it, writes Fiachra Ó Cionnaith

HE’LL fight them on the beaches. He’ll fight them on the landing grounds and bridgeheads. He’ll fight them in the fields and in the streets.

He’ll fight to defend his island, with growing confidence and growing strength in the air, whatever the cost may be.

He’ll never surrender.

But... and whisper it in case he hears... at the heart of the arsenal of weaponary he will use to perform such feats will be a glaring contradiction dressed up as compromise which calls into question his entire argument.

Finance Minister Michael Noonan was in Churchillian mood after the Cabinet decision yesterday to appeal the European Commission’s €13bn tax ruling against Apple.

Michael Noonan
Michael Noonan

Speaking in the picturesque courtyard of Government Buildings before a horde of Irish and foreign journalists, the senior Fine Gael minister insisted that Ireland is not for turning, no matter the consequences.

Explaining Government’s decision to reject the money that has been drooled over by just about every voter and more than a few TDs in recent days, the long-standing Limerick TD summoned his best Winston Churchill impression, added a sprinkling of Nigel Farage, and insisted Ireland is the victim of an EU conspiracy and must not bow down to Germany and France over our national tax rules.

Comparing the current stand-off with Taoiseach Enda Kenny’s first meeting with then French president Nicholas Sarkozy in spring 2011 in which the latter attempted to force Ireland into hiking our coveted 12.5% corporation tax rate in return for a better EU/IMF bailout deal, Mr Noonan said the current battle is just the latest attempt by foreign forces to establish a “bridgehead” to attack our tax system.

Asked if Tuesday’s jaw-dropping €13bn ruling by European Commissioner for Competition Margrethe Vestager against Apple and — technically — in favour of Ireland was a “proxy attack” on our values (or at least how we value them), Mr Noonan took a deep breath and launched into a modern-day impression of the long-deceased Second World War British prime minister.

“I do, I think they are establishing a bridgehead,” he growled.

“There is a lot of envy across Europe about how successful we have been in putting the head-quarters of so many companies into Ireland.

Minister for Finance Michael Noonan, right, and the Minister for Public Expenditure and Reform Paschal Donohoe. Picture: Getty
Minister for Finance Michael Noonan, right, and the Minister for Public Expenditure and Reform Paschal Donohoe. Picture: Getty

“You will recall the Taoiseach’s first meeting in Europe in 2011, there was an attempt to bully him by [French] president [Nicholas] Sarkozy to drive the corporation tax rate up to 15% as a quid pro quo for the bailout programme that was being offered.

“There will be no change in Ireland’s 12.5% rate. It is in our competence to fix the rates and no bridgehead by any commissioner is going to change that.

“We will fight at home, abroad, and in the courts.”

For those of a similar mind, it was a convincing argument, one which paints Ireland as a small country which is being pushed around by its larger neighbours who are jealous of our lucrative, honestly innocent relationships with multi-national firms.

How dare they try and give us a whopping big cheque for €13bn that we could really do with, while simultaneously shining a worldwide spotlight on our corporate tax gymnastics, you could almost hear him mumble under his breath, between coughs.

Unfortunately, although the tone will play well to his Fine Gael base and be a welcome relief to at least one technology giant chief executive frantically checking for updates on his iPhone, it doesn’t quite ring true.

While Government has finally agreed to appeal the EU ruling after much earnest contemplation and more than a little fretting over its political future, it — thanks to those lovable rogues, the Independent ministers — has also agreed to argue the exact opposite in the small print.

In order to convince the Independent Alliance and unaligned Independent minister Katherine Zappone to back the appeal, Fine Gael has had to agree to a review of other multi-nationals’ tax bills and the introduction of a “fair and transparent” tax system that does not have any hint of cozy but disputed deals.

Tim Cook
Tim Cook

In other words, Fine Gael is saying there is nothing wrong with Ireland’s tax system but wants — under the wording of the deal — to look under every multinational stone in case there is and to reform the tax system so it is transparent despite already believing it is; while Independents want the eye-catching transparency for a system they now insist already has nothing to hide.

Logic dictates you cannot want the detailed reforms without admitting there is something that needs reforming.

And while Mr Noonan’s full-blooded speech managed managed to move the debate onto a different issue, for now, it is a contradiction the opposition quickly leaped on and which risks damaging Ireland’s now imminent EU ruling appeal.

The Government’s Independent members are, officially, now all in favour of standing guard on our beaches under the flag of Apple. Sorry, we mean Ireland.

But you still have to wonder if their hearts are firmly in it, particularly when one — John Halligan — openly said yesterday “multinationals probably don’t pay a reasonable sum of tax”.

The difference between Mr Noonan and Mr Churchill is that while both can deliver a rabble-rousing speech regardless of the facts bearing down on them, only the Second World War leader could be sure of his army’s undying support.

As the contradictions dressed up as compromise in the Government deal show, even when our own Limerick leader’s top brass commit to standing full square behind him he can’t be certain they’re not equally ready to shoot him in the back.

You can’t call for tax reforms without admitting something needs reforming

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