Belfast Telegraph

Government refuses to raise tax

The Government has shown first signs of defiance against the European agenda by refusing to bow to pressure to hike corporation tax.

Both Taoiseach Enda Kenny and Tanaiste Eamon Gilmore shot down claims that French President Francois Hollande could push for Ireland to increase its relatively low 12.5% rate.

"Ireland will support a growth agenda, Ireland will support an investment agenda, but clearly there are issues in there with which we don't agree," said Mr Kenny.

"Obviously in the context of changes with the corporation tax rate and localised financial transaction taxes are not in the interests of this country."

Just hours after freshly-inaugurated Mr Hollande met with German Chancellor Angela Merkel for the first time to discuss stitching growth measures into the fiscal treaty, one of his advisers unveiled the thinking on tax harmonisation.

His predecessor Nicolas Sarkozy and Ms Merkel, whose tight allegiance helped to promote the fiscal treaty and focus on stability, tried to force the issue on Ireland previously, but the Government has continually refused to bend.

Earlier, Mr Gilmore insisted the position on corporation tax was absolutely firm to ensure Ireland remains attractive to investors looking for a low rate. He said it would also boost confidence in the euro and the country as a whole.

Although a line has been drawn in the sand over corporation tax, Finance Minister Michael Noonan said a Yes vote in the referendum and a commitment to ratify the fiscal treaty would send a positive signal to Europe that Ireland is serious about repairing the economy.

He said ratifying the deal, which aims to enforce stricter budgetary rules and increased control over money in and out of countries, would allow Ireland to become a key player in the eurozone.

Mr Noonan also drew laughter during a Bloomberg Ireland Economic summit when he gave his analysis of the limited economic links between Ireland and Greece, and the impact the latter's leaving the eurozone may have. "Apart from the Greek islands, I think most Irish people do not have a lot ... if you go into the shops here, apart from feta cheese, how many Greek items do you put in your basket?" he said.

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