NEW JUSTICE MINISTER Alan Shatter has insisted that Ireland’s 12.5 per cent rate of corporation tax will be protected at all costs – even if it means having to shun a lower rate of interest on Ireland’s bailout deal.
Speaking on RTÉ Radio 1′s This Week programme, Shatter said any discussion of the corporate tax rate – considered a hallmark of Ireland’s heavily export-led economy – was “off the table”.
It was the government’s role to protect that rate, and to persuade the other Eurozone nations that increasing it would do more harm to the Irish economy than good.
Other European countries – in particular France and Germany – have been trying to get Ireland to raise its corporate rate if it is to get a renegotiated interest rate on the €45bn bailout being borrowed from European sources.
At a meeting on Friday, Taoiseach Enda Kenny and French president Nicolas Sarkozy exchanged “harsh words” over whether the corporate tax rate could be negotiated – with Kenny saying he turned down a 1 per cent cut on the interest rate, an offer Greece had accepted.
Shatter continued, RTÉ News reports, that he expected the interest rate to be discussed again later in the month but said it would be “premature” to discuss the rate until the results of the current banking stress tests were revealed.
This morning, the Sunday Independent claimed that those tests would reveal a new ‘black hole’ of up to €25bn in the country’s banking sector.
It was separately reported by the BBC this afternoon that the corporate tax rate in Northern Ireland could be lowered as soon as next year.
The North’s politicians have long been seeking a uniform 12.5 per cent corporate tax rate, saying the UK’s own rate of 28 per cent hinders foreign investment in the six counties.
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