Tuesday 23 July 2019

Would it be too taxing for our Lisbon critics to study treaty?

While I fully respect Bruce Arnold's right to form an opinion on the Lisbon Treaty, one would hope a columnist of his experience would get his facts right.

Mr Arnold demonstrates an elementary error in his understanding of the treaty's treatment of taxation. It appears that he has not properly read the relevant section of the treaty, which is clear, unambiguous and certainly does not do what Mr Arnold suggests it does.

Mr Arnold makes much of an amendment to Article 93 of the treaty. He is correct when he says that the words "and to avoid distortion of competition" are to be added to the article.

But he is ignorant of two essential points. The first point is that the amended treaty article contains the words "The Council shall, acting unanimously".

This means every member state has the right to veto any proposal.

The second fundamental gaffe in Mr Arnold's article is his contention that the change he refers to would allow the Court of Justice to outlaw our current corporation tax rate.

The revised article refers to indirect taxes not corporation or any other form of direct taxation.

Had Mr Arnold read the article properly he would have seen that it applies to "the harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation".

Nowhere is there any mention of corporation tax or of any other direct tax.

This line of argument being repeated by Mr Arnold has been one of the most disgracefully misleading parts of the campaign by opponents of the Lisbon Treaty.

The ability to get their facts so badly wrong in this regard ought to make people very wary of the other claims they make against the treaty.

Mr Arnold's assertion that the words "to avoid distortion of competition" could be used by the Court of Justice as a basis for interfering with our corporation tax regime is, and there is no courteous way of putting it, simply outrageous

On taxation, it is worth mentioning that the director of taxation at the Institute of Chartered Accountants of Ireland, Brian Keegan, wrote that the Lisbon Treaty "leaves direct taxes within the control of individual member states". One can safely assume that the Institute of Chartered Accountants of Ireland has paid more attention to what the treaty has to say on taxation than Mr Arnold.

The president of the American Chamber of Commerce in Ireland, Paul Rellis, one of an impressive list of senior business figures arguing for a 'Yes' vote, has written that Ireland's continued economic success is "dependent on the country remaining a fully committed and influential member of the European Union, and that commitment can best be shown by a resounding 'Yes' vote".

Members of the American Chamber of Commerce in Ireland would be directly affected by any interference with our corporation tax rates. It seems unlikely that a 'Yes' vote would win any support from that quarter if there was a shred of credibility in Mr Arnold's views.

Are we to believe that IBEC would enthusiastically back a treaty that would result in raised business taxes here?

The words of the treaty, and the opinion of authoritative business figures, speak for themselves. The Lisbon Treaty poses no threat to our low corporation tax rates. Indeed, the treaty copper-fastens our veto in this area and this is one of the many reasons why it deserves to be supported.

Taxation is not the only area where Mr Arnold is way off the mark. He makes another surprisingly basic error in his comments about the Irish Constitution.

He suggests that the amendment on which the Irish people will vote marks a fundamental change in Ireland's status. The basis of his concern is the provision that nothing in our Constitution can invalidate anything "necessitated" by our membership of the EU.

Bruce Arnold should know that this provision has been in our Constitution since 1973 when we joined what is now the European Union. He should also know that it applies only in those policy areas where the member states, including Ireland, have conferred powers on the European Union.

The reality is that the Lisbon Treaty will make the EU, which has been so positive for Ireland, more efficient, more effective, more democratic and better equipped to deal with the major challenges ahead: globalisation, energy security, climate change, migration, asylum and cross-border crime.

These are problems that no individual state can resolve on its own.

It makes sense for the 27 member states of the EU to pool their resources to deal with these shared challenges.

This treaty deserves our support because it will enable Ireland to continue deriving benefit from membership, as we have done for 35 years.

Not for the first time, fate more than choice has placed the key to Europe's future in the hands of the Irish people.

On every occasion that Ireland has voted 'Yes' in an EU referendum, Europe has benefited and Ireland has gained.

That is why the Government, the overwhelming majority of members of Dail Eireann, all of the major political parties, leading chambers of commerce, key business organisations and leading members of the business community, who have a track record of job creation in Ireland, are calling for a 'Yes' vote.

Dick Roche is the Minister for European Affairs

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