Cowen bullish as he vows to defend low corporation tax regime
Published 20/01/2011 | 05:00
TAOISEACH Brian Cowen yesterday insisted he would continue to defend Ireland's low corporation tax rate from outside attacks.
Mr Cowen said the 12.5pc rate was the cornerstone of the country's industrial policy, as well as an essential feature of its growth strategy.
He argued there was no evidence that imposing a higher rate would result in larger revenues for the State. French President Nicolas Sarkozy recently said Ireland should not be allowed to access the EU/IMF bailout while maintaining a low corporation tax rate.
The Irish rate is much more competitive than that of France, where companies pay a rate of 33pc and Paris has long accused Dublin of "fiscal dumping", or unfairly attracting investment, by keeping it so low.
Mr Cowen's comments came amid growing expectations that the 5.7pc interest rate on bailout loans of €67.5bn could be cut.
Mr Cowen said the commitment to maintaining the corporation rate had been reiterated by the Government during the EU-ECB-IMF talks.
"There is no evidence that imposing a higher corporate tax rate would sustain higher revenues or contribute in any way to restoring balance to the public finances," he said.
"All impartial analysis points in the opposite direction, supporting the view that the 12.5pc rate is key to sustaining our attractiveness to foreign direct investment and to sustaining the export-led recovery under way.
"The (Council) president knows directly from me what our position is on this matter," he added.
"I strongly defended our position in this regard at last month's European Council and will continue to do so."