Corporation tax 'safe' - Gilmore

Tánaiste Eamon Gilmore has insisted the Government will not increase its rate of corporation tax despite renewed pressure from France.

His comments come after a speech by Nicolas Sarkozy last night in which the French president criticised Ireland's corporation tax regime and warned that "unfair competition" on tax could not continue.

Mr Gilmore said today that the existing 12.5 per cent rate will not be altered.

“The position of the Irish Government is absolutely clear,” he said. “We are retaining our rate of corporation tax.

“It’s hugely important for us to provide that certainty for investors and potential investors that they know that the Irish Government is not going to increase corporation tax.”

Mr Gilmore dismissed Mr Sarkozy’s comments on tax reform, saying they were similar to comments he had made on previous occasions.

“The president said last night things that the president and the French government have been saying for some time. There’s nothing new in that,” said Mr Gilmore.

Earlier, Minister for Education Ruairí Quinn also downplayed talk of possible changes to Ireland's corporation tax.

Speaking in Dublin, Mr Quinn said he believed Mr Sarkozy's speech had been primarily targeted at a domestic audience in the context of a forthcoming presidential campaign.

"I think you have to take some of the things he said with a grain of salt. This man is starting an election campaign for re-election as president of France next summer and all of his comments must be filtered and seen in that context," said Mr Quinn.

"This is for domestic consumption. The reality is that French corporation tax in certain circumstances is less than ours," he added.

Mr Sarkozy has previously clashed with the Government over the country's tax regime and pushed for it to be changed. During a major speech in the port city of Toulon last night, Mr Sarkozy said looming changes to the EU treaties would “refound and rethink” Europe.

Mr Quinn said this morning he welcomed the commitment that European leaders are giving to "reinforcing the strength and discipline" of the single currency.

"A common shared currency among 17 sovereign states requires very tight and rigid budgetary rules," he said. "The stability and growth pact was a great idea and had strong rules but unfortunately they weren't enforced and that's one of the reasons why there's a lack of credibility in some markets as to the situation regarding the euro."

Director of employers group Ibec Brendan McGinty said today Irish businesses need the most competitive terms possible. Mr McGinty told RTÉ's Morning Ireland that any move on the tax would be "a no-go area for Irish business".