Ireland Rejects Tax Harmonisation Proposal

by Jason Gorringe, Tax-News.com, London

26 February 2002

Following German Chancellor Gerhard Schroder's controversial suggestion that taxes should be levied at EU level, the Irish Deputy Prime Minister has warned that Ireland will never accept European tax harmonisation.

Speaking at the annual Institute of Taxation dinner, Tanaiste Mary Harney stated categorically that there are: 'no circumstances in the short, medium, or long term in which Ireland will cede our fiscal autonomy to EU institutions.'

Ms Harney went on to say that low taxes had been central to Ireland's economic success, and condemned the economic records of several EU member states, including Germany, arguing that high taxation and regulation had cost jobs.

Observing that unemployment currently stands at 9% in France and Italy, 10% in Germany, 11% in Belgium, and 13% in Spain, the Tanaiste suggested that: 'The main reason that unemployment is high in Europe is that over-taxation and over-regulation are preventing the countries of Europe and the people of Europe from achieving their full potential.'

Ms Harney's comments were condemned by former Fine Gael Taoiseach, John Bruton, who accused the Deputy Prime Minister of stirring up anti-EU sentiment at an inappropriate time.

Meanwhile, Irish retailers are nervously anticipating the introduction of the new environmental tax on plastic bags, due to come into force on Monday. Ailish Forde, Director of the small grocers' organisation RGDATA, has criticised the Government for not publicising the tax widely enough, arguing that when the 15 cent levy is introduced next week, customers will feel that the retailer is 'ripping them off'.

Many of the country's larger retail chains have revealed that they will replace plastic bags with more expensive paper ones when the tax comes into force, in order to avoid having to pass the charge on to their customers.

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