Paschal Donohoe doubles down on opposition to EU digital sales tax

Minister reiterates Ireland’s stance at meeting of finance ministers in Brussels

Minister for Finance Paschal Donohoe has said that Ireland will continue to oppose proposals for an EU digital sales tax. Video: EU Council

 

There is no wavering in Dublin’s opposition to proposals for an EU digital sales tax, Minister for Finance Paschal Donohoe insisted ahead of an EU meeting of finance ministers, Ecofin, in Brussels that will debate the issue on Tuesday morning.

French and European Commission sources claim that the tide is turning in favour of the proposal for a sales tax on giant digital companies, against which Ireland, under increasing pressure, has been leading the charge. The proposals, which the commission hopes to have approved in December, require unanimity.

Mr Donohoe also insisted, despite French claims to this reporter that the EU could compensate Ireland for tax losses, that “no such offer has been put to me or to the Irish Government”. The issue, he said, was anyway not about revenue but “the broader principles in relation to reform of taxes and policy within Europe and across the world”.

That should be done through the OECD. “I’ll be continuing to articulate the views that I have on the digital sales tax since this issue was first discussed in Estonia over a year ago . I believe that a change like this . . . could have significant effects in relation to trade and transatlantic trade. And clearly, as a small, open economy, we are eager to avoid that happening.”

Budget plans

Ministers of the 19 euro countries on Monday night warned Italy’s populist government that it needs to rewrite its budget plans which are in substantial breach of EU-agreed deficit guidelines and threaten to push up the country’s huge debt.

Bruno Le Maire, France’s minister for the economy, said that he hoped Italy would “seize the hand offered by the commission” to hold talks on how to adjust the 2019 spending plans, which Italy estimates would see its budget deficit increase next year to 2.4 per cent of GDP.

“What is at stake now is our common currency,” he told journalists on his way in to the meeting.

If you share a currency with many other countries, we do all have responsibilities to each other

Mário Centeno, the Eurogroup president, said he remained hopeful that Italy will agree to amend its spending plans despite its government having insisted up to now that it will not do so.

Rome has until November 13th to send a revised plan to Brussels, after the Commission last month unprecedentedly rejected the draft budget.

No slack

Mr Donohoe made clear he did not feel the European Union should cut Italy any slack, but said that he hoped Rome and the commission could reach agreement. “One of the abiding lessons that we learnt from the global and European economic and financial crisis is that if you are inside a single currency zone and if you share a currency with many other countries, we do all have responsibilities to each other.

“And those responsibilities are currently articulated in the rules that the European Commission oversees.

“When I was preparing my budget and presenting that to Dáil Éireann I had to recognise what those rules are and [have] confidence that they would meet the requirements of the fiscal rules. And I think it’s important that all the other member states abide by the rules that are set in European law and that are overseen by the commission.”