‘We won’t take part in EU tax law talks’
Donohoe’s vow amid threat to our corporate rate
IRELAND will not take part in any EU discussions that threaten our right to set our own corporation tax rate, Paschal Donohoe pledged yesterday.
And the Finance Minister said this country would not be alone in its opposition to any such move.
‘I know we will be joined by more countries, ones that share our view,’ Mr Donohoe said.
The head of the European Commission, Jean-Claude Juncker, has suggested a future change to voting arrangements.
He told the European Parliament that individual countries should no longer be able to veto changes to how big technology companies such as Apple, Google or Facebook are taxed.
On Wednesday, the chairman of the Fiscal Advisory Council, Séamus Coffey, warned that any move to harmonise corporation tax rates for multinationals across the EU could cost Ireland €4billion a year in lost revenues.
And Mr Donohoe said yesterday that Ireland would not surrender our unique selling point of a 12.5% rate of corporation tax. ‘It is an entirely legitimate and entirely suitable policy choice for a small country like Ireland,’ he said.
If tax harmonisation were to materialise, it would be a very big threat to this country’s drive for foreign direct investment, he admitted. However, Mr Donohoe added: ‘I’ll be very explicit. We will not participate in any discussions which challenge our national interest like that.’
The need for unanimity on such matters was a key part of the workings of the European Council, he said, adding that it was not in the Commission’s power to alter the arrangements on its own.
Mr Donohoe continued: ‘The national interest on key issues will continue to be protected by the Taoiseach and I.’
Leo Varadkar did not allude to the issue yesterday at his party’s think-in in Clonmel, Co. Tipperary. In a speech to public representatives, however, the Taoiseach confirmed that the party’s key election promise in the last campaign was being confined to the dustbin.
Fine Gael no longer aimed to abolish the Universal Social Charge, he said, but would amalgamate it over time with PRSI.
‘We want to expand and improve social insurance-related benefits,’ he said. ‘That is why we have taken the decision to amalgamate USC with PRSI.’
The Budget next month will balance the books and continue to reduce the national debt, Mr Varadkar said, adding that the Government would not repeat the mistakes of others. Spending increases would be modest, and the package would seek to reward work and enterprise.
‘It will benefit those on middle incomes who pay the highest rates of tax on far too modest incomes,’ he added.
‘High taxes on the middle classes are a barrier to opportunity and to work. They are a cap on aspiration, and there should be no cap on aspiration in the Republic we wish to build.’