Tax harmony 'not an issue'

Thu, May 10, 2012, 01:00

CORPORATION TAX:IRELAND’S 12.5 per cent rate of corporation tax was not in any jeopardy in the referendum, two Government Ministers said in Dublin yesterday.

Minister for Enterprise Richard Bruton and Minister for Transport Leo Varadkar also rejected suggestions the election of François Hollande as French president made any material difference to the fiscal treaty.

Mr Bruton said: “What François Hollande is seeking to develop is an additional growth strategy. We would welcome that.

“The Taoiseach, time and again, has put that on the European Council agenda.” He added: “I think that agenda will be given new impetus by president Hollande and that is to be welcomed.”

Mr Varadkar said: “I think it is fair to say that the current Government has always accepted that austerity on its own won’t work.

“You need a mix of balancing the budget on one side and growth on the other. So, in that sense, the election of François Hollande is welcome because it will add to that view that Europe needs a growth strategy as well.

“But the treaty won’t fundamentally change. Irish people have had this experience before, with Lisbon and with Nice for example.

“Those treaties were not renegotiated, they didn’t change fundamentally. What happened was, a protocol or declaration was added on to it. And I suppose that’s probably what will happen in this case.

“But the fundamental treaty will not change and that’s why it still makes sense to have the referendum.”

On tax harmonisation, he said: “The issue of corporation tax not only is not up for negotiation, those guarantees are actually now enshrined and that’s progressing through the European Parliament to ratification.”

Mr Bruton agreed: “The Government’s position on harmonisation of taxes has been absolutely clear: it is a red-line issue for the Government.

“We have built a recovery strategy on a certain approach to taxation which is absolutely central. That has been recognised by Europe. It will be spelt out in the protocols. We have a veto in respect of that.”