EU needs to unlock single market’s potential - Ibec

Head of European Commission’s in the Republic said it might have some questions for the State in the area of taxation

The EU needs to focus on unlocking the single market’s potential but should respect member state’s ability to manage their own tax and social affairs, business group, Ibec says.

Ibec published a position paper, Ireland in the EU: a dynamic future, on Thursday detailing its members' views of what the union should prioritise as it moves past Brexit.

According to Pat Ivory, Ibec's director of EU and International Affairs, the organisation believes that there are key areas on which the union should focus while recognising that member states are better placed to manage other activities.

In the first of six points, Ibec argues that the EU needs to continue expanding the single market. “In the goods area the single market is has been well advanced but we now need to focus on the services area and in particular digital,” Mr Ivory said at a conference to mark the paper’s launch.

Helen McEntee, Minster of State for European Affairs, told the same gathering that “completing the single market needs to be a priority”. She pointed out that doing so could add €650 billion to the wealth generated by the EU every year.

Ibec argues that member states should have the the power to tailor tax policies to their own needs. The EU is weighing proposals for a common corporate tax base, something the organisation says is a step in the wrong direction.

Its report argues that the EU should instead implement the Organisation for Economic Co-operation and Development’s base erosion and profit-shifting strategy.

This is meant to tackle multi-nationals which create networks of subsidiaries in different countries so that they can pay little or no tax. Ibec’s position relfects that of the Government.

However, Gerry Kiely, head of the European Commission's representation in the Republic, said that while Brussels would agree with many of the points raised by Ibec "we might have some questions in the area of taxation".

Speaking after the launch, Ms McEntee stressed that the Government’s position has always been that member states should set their own tax rates. “Our view hasn’t changed on that, and there are other member states that feel the same as us,” she said.

Mr Ivory told the gathering that member states also need control over their own social policy. “We already have a highly-developed social model and our workers are better protected and enjoy better conditions that any other region in the world,” he said, adding that the EU should be proud of that.

However, he argued that Brussels should allow member states to develop social policies that matched their own local needs.

Ibec’s document also argues that fiscal rules governing member state spending and finances should be eased on capital investment to allow countries develop their infrastructure.