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Irish government rules out raising corporation tax | Irish government rules out raising corporation tax |
(about 3 hours later) | |
The Irish government has insisted it will not raise the country's low corporation tax rate in return for a European Union-led bail-out. | The Irish government has insisted it will not raise the country's low corporation tax rate in return for a European Union-led bail-out. |
Deputy Prime Minister Mary Coughlan said the 12.5% rate - much lower than the EU average - was "non-negotiable". | Deputy Prime Minister Mary Coughlan said the 12.5% rate - much lower than the EU average - was "non-negotiable". |
Her comments come as speculation grows that France and Germany want Dublin to raise the tax in return for aid. | |
The Irish government is in bail-out talks with officials from the EU, the European Central Bank and the IMF. | |
An aid package of 45bn-90bn euros ($62bn-133bn, £38bn-77bn) is expected to emerge next week, according to an unnamed source quoted by the Reuters news agency. | |
It will coincide with, or follow shortly after, the announcement by the Irish Republic of a new four-year austerity programme. | |
On Thursday, the Irish government admitted for the first that it needed outside help. | |
Finance Minister Brian Lenihan said he felt "no sense of shame" over the country's economic record, but that it now needed outside help. | Finance Minister Brian Lenihan said he felt "no sense of shame" over the country's economic record, but that it now needed outside help. |
Previously the government had said it did not need any financial support from the European Union and International Monetary Fund (IMF). | Previously the government had said it did not need any financial support from the European Union and International Monetary Fund (IMF). |
'Predatory' | 'Predatory' |
The Republic's low corporation tax has been criticised by other EU nations, who argue that it gives the country too much of an advantage in attracting overseas investment. | The Republic's low corporation tax has been criticised by other EU nations, who argue that it gives the country too much of an advantage in attracting overseas investment. |
They now argue that the Republic should not be allowed to solely rely on a bail-out, and that it should instead raise the tax rate to help boost government funds. | They now argue that the Republic should not be allowed to solely rely on a bail-out, and that it should instead raise the tax rate to help boost government funds. |
The Financial Times on Friday reported a French official describing it as "almost predatory". | The Financial Times on Friday reported a French official describing it as "almost predatory". |
However, the Republic's European Minister Dick Roche, also insisted that the corporation tax rate was "certainly not up for negotiation". | However, the Republic's European Minister Dick Roche, also insisted that the corporation tax rate was "certainly not up for negotiation". |
He told the BBC: "There has been some very unhelpful chatter in the background in the last few days about our corporation profit tax. | He told the BBC: "There has been some very unhelpful chatter in the background in the last few days about our corporation profit tax. |
"Where would be the sense of destroying one of the great drivers of growth?" | "Where would be the sense of destroying one of the great drivers of growth?" |
EU, European Central Bank, and IMF officials arrived in Dublin on Thursday to discuss the country's debt crisis, and what aid the country required. | EU, European Central Bank, and IMF officials arrived in Dublin on Thursday to discuss the country's debt crisis, and what aid the country required. |
The Republic's Central Bank Governor, Patrick Honohan, said he expected a loan in the region of "tens of billions" of euros. | The Republic's Central Bank Governor, Patrick Honohan, said he expected a loan in the region of "tens of billions" of euros. |
Finance Minister Mr Lenihan said the country's problem were caused by its heavily indebted banks, which the government has had to bail-out to the cost of 45bn euros (£39bn; $60.1bn). | |
"The big difficulty of course is that the banks grew to such a size that they became too unmanageable for the state itself, that's the big difficulty here," he said. | "The big difficulty of course is that the banks grew to such a size that they became too unmanageable for the state itself, that's the big difficulty here," he said. |
"And that's why we have to consider external assistance to stabilise our banking system." | "And that's why we have to consider external assistance to stabilise our banking system." |
Are you in Ireland or another EU country? What conditions do you think should be attached to any potential bail-out for Ireland? Send us your comments using the form below. | Are you in Ireland or another EU country? What conditions do you think should be attached to any potential bail-out for Ireland? Send us your comments using the form below. |