Government 'firm' on tax rate

 

The Government has insisted it has not shifted in its stance to protect Ireland’s 12.5 per cent corporation tax rate.

Minister for Enterprise Richard Bruton stressed it was a red line issue amid reports of renewed pressure from Germany to move on the rate in exchange for better bailout terms.

As IMF and EU inspectors continue their review of the state’s books, Mr Bruton said it was crucial for Europe to allow Ireland to recover.

“As far as Ireland is concerned our corporate tax rate of 12.5 per cent is a red line issue,” Mr Bruton said.

“It is not only crucial for Ireland but it is crucial also for Europe if they want to see Ireland have an export-led recovery, which is the only way in which we will resolve our European problems.”

At the end of a two-day summit in Budapest yesterday, German finance minister Wolfgang Schauble struck a blunt tone when he signalled Ireland would have to make some gesture on corporation tax in return for an interest rate reduction on the bailout loans.

However, Mr Bruton stressed there was no shift in the Government’s position.

The Government has consistently faced pressure from French president Nicolas Sarkozy and German chancellor Angela Merkel to increase corporation tax in return for an easing of interest rates.

PA