Government must be resolute on tax rate

EUROPEAN Commission President Jean-Claude Juncker was characteristically upbeat in his state of the union speech to the European Parliament yesterday when he declared that the “wind is back in Europe’s sails”. The wind may have picked up economically but Mr Juncker’s ambition for a more integrated Union is already heading into heavy weather.

His backing for the idea of transnational MEPs, representing Europe rather than a specific region, is not even supported by his own centre-right European People’s Party.

And his idea of a Super Presidency, combining the roles of president of the European council of EU leaders and his own job, was blown out of the water immediately by Denmark’s prime minister, Lars Lokke Rasmussen, who said “let’s not mix roles and competences”.

Similarly his call for more decisions to be taken by qualified majority votes, including on sensitive areas such as tax, will meet stiff resistance, particularly from Ireland.

Mr Juncker said he wanted to see the Common Consolidated Corporate Tax Base (CCCTB) implemented via qualified majority voting rather than by the unanimous agreement of all countries.

The Government is opposed to the CCCTB plans, amid concerns it would undermine the competitiveness of the 12.5pc corporate tax rate that has helped make this country a favourite European base for many US multinationals.

This is not the first, nor will it be the last, time that European voices have been raised about our tax regime.

But now is the worst possible time for it to come back on the agenda, with the economic post-Brexit gale threatening us on the horizon.

Leo Varadkar’s Government will have to be resolute in its opposition to any change in our ability to control Irish tax policy.