KPMG Tax Expert Urges Irish Government To Increase Corporate Taxes

by Jason Gorringe, Tax-News.com, London

02 April 2004

Speaking to the Irish Times this week, KPMG tax partner Paul McGowan suggested that Ireland should agree to an EU-wide minimum corporate tax level, in order to avoid becoming a victim of tax competition from the 10 new EU states.

He suggested that, in view of the fact that the Republic is set to compete with accession states with corporate tax levels which in some cases are lower than its own, the Irish government might be wise to take a more conciliatory approach to countries such as France and Germany, which are advocating corporate tax harmonisation.

"When Ireland, Luxembourg, Cyprus, Malta and the other accession states simultaneously attack the job market and tax revenues of the high-tax states and these states are not permitted to defend themselves, will matters reach breaking point?" he asked.

The KPMG tax expert went on to suggest that Ireland should sign up to an EU-wide minimum corporate tax level, on the understanding that the country's tax rates are not then challenged for the next 25 years.

"If the rate we negotiate is the lowest permitted in the EU, what we would have done is ensure that we ourselves cannot become victims of tax competition," he explained to the Irish Times.

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