Irish Business Community Comes Out In Support Of Harney

by Jason Gorringe, Tax-News.com, London

27 February 2002

The Irish business community has come out in support of Deputy Prime Minister Mary Harney, following criticism of her stance on European tax harmonisation.

As reported here on Tuesday, responding to suggestions by German Chancellor Gerhard Schroder that national taxes should be imposed by the EU, the Tanaiste stated unequivocally that there were: 'no circumstances in the short, medium, or long-term in which Ireland will cede our fiscal autonomy to EU institutions'.

Ms Harney's comments were subsequently slammed by former Taoiseach John Bruton, who accused her of stirring up anti-EU sentiment, and maintained that there was no danger of harmonised European tax rates.

However, the Irish business community yesterday announced its strong support for the Deputy Prime Minister's firm stance on the issue. Irish Business and Employers Confederation (IBEC) Director-General, Turlough O'Sullivan stated earlier this week that:

'IBEC is adamant that there must not be any changes in our corporate tax regime, which has played a major part in attracting foreign investment.' Mr O'Sullivan went on to observe that many EU member countries, emerging European countries, and applicants for EU membership are now beginning to emulate the Irish tax system, and are reducing their corporate tax rates, pointing to Estonia as a prime example.

According to an IBEC spokesman earlier this week, the Confederation is also concerned about EC proposals announced late last year which would allow European countries to choose where in the EU they are assessed for tax.

'That might seem benign, but we are worried that it could be a Trojan horse for harmonisation of rates, if firms can choose their base,' he explained, adding that: 'The EU economy will do best if it allows some flexibility on taxation.'

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