Ireland urged to fight EU tax plan
The French and German governments have prepared a paper for the convention on the future of Europe which proposes to harmonise corporation tax and value added tax to improve the single market. This move is expected to be opposed by Ireland and Britain. Goodbody Stockbrokers chief economist Colin Hunt said such a development would be massively detrimental to Ireland's economic stability and should be resolutely resisted.
"Fiscal sovereignty remains a national issue and cannot be transferred to Brussels without the approval of parliament and people by referendum. Is anybody willing to offer odds on the Irish electorate voting to hand power over our taxes to the Commission," he asked.
NUI Maynooth economics lecturer Jim O'Leary said a pan-European tax harmonisation policy would do severe damage to Ireland on the jobs front, making it harder to attract foreign direct investment and to keep key large employers in the country. Mr O'Leary singled out the pharmaceutical sector as being particularly vulnerable to plans to eliminate tax competitiveness within the EU. "We have to fight this tooth-and-nail. Our 12.5% corporation tax rate might not be as important now as it once was in attracting multi-national companies to invest in Ireland, but it is still a major factor," he said.
He said that once-off gains of cheaper car prices as a result of tax harmonisation should not be seen as lures to persuade voters to agree to tax harmonisation. "The Irish Government can reduce tax on cars while retaining our sovereignty," he said.
The Financial Times reported yesterday that the tax question will be addressed in a joint Franco-German paper on economic governance, and follows rapidly after separate documents on defence and justice and home affairs. The newspaper suggested the most significant paper could come in January, when Paris and Berlin hope to unveil an ambitious joint document on how the European Union should be run, to coincide with the 40th
anniversary of the Franco-German
Elysée treaty.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
