Taoiseach and Higgins in row overtax regime

Taoiseach Bertie Ahern and Socialist Party TD Joe Higgins traded insults in a Dáil row over Ireland's corporation tax rates.

Taoiseach Bertie Ahern and Socialist Party TD Joe Higgins traded insults in a Dáil row over Ireland's corporation tax rates.

Mr Higgins claimed the Government allowed multinational corporations to use the State "as a blatant Cayman Islands-like tax scam" to launder billions of euro and avoid paying tax, while Mr Ahern said the Dublin West TD was only happy when things were bad and that was why he was thrown out of the Labour Party.

"If the sun shines you want to see rain," he said. He also warned Mr Higgins that he should "not fall into the trap that is being revived again by those who want to see a harmonised tax system in the EU".

Mr Higgins claimed, however, that the Taoiseach had been instrumental in "causing a race to the bottom in corporation rates within the EU".

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He accused the Government of cossetting companies like Procter & Gamble "which is a fabulously profitable corporation.

"However, its workers are being put through the wringer today because the company wants much more."

He said "Irish semi-State companies are using ghost companies in Amsterdam to avoid paying taxes", and companies like AIB and CRH made billions in profits but paid "a relative pittance in tax".

The State was "facilitating massive tax avoidance by Irish multimillionaire tax exiles, although these patriots make the sacrifice of abandoning their far-flung luxury mansions to tug the Taoiseach's sleeve every summer in Galway, no doubt to ensure you will continue to allow them to skim on taxes".

The Taoiseach created a tax paradise for big business and the super rich but would not pay the nurses their due. "We have the second highest pupil-teacher ratio in primary schools in the EU. We have desperate parents who cannot access services for children with special needs allegedly for lack of resources." But Mr Ahern accused him of adopting the "classic script of those in Europe who criticise the Irish tax system and want to harmonise European taxes". Those countries were envious of Ireland's ability "to run a good economy and generate 800,000 jobs".

He added that "our revenue laws are as tough as anywhere in the organised world".

Mr Ahern said "all companies, including commercial semi-States, are entitled to organise their tax affairs in an efficient and legal manner to minimise the amount of tax payable.

"This is the manner in which commercial companies operate throughout the world."

Mr Ahern added: "As we receive hundreds of millions more in tax revenue than was the case previously, we are able to put far more money into employing nurses, doctors and other paramedical staff, as well as thousands of teachers."

Marie O'Halloran

Marie O'Halloran

Marie O'Halloran is Parliamentary Correspondent of The Irish Times