Connect with us

Hi, what are you looking for?


No one way road to financial solidarity, EU tells Ireland

BRUSSELS, Mar 15 – German Finance Minister Wolfgang Schaeuble and EU economic affairs chief Olli Rehn urged Ireland Tuesday to be realistic and drop opposition to raising a corporate tax rate critics say is unfairly low.

"If Ireland wants something additional from us, than we can raise that issue," said Schaeuble of Dublin\’s demand for the interest rate on its EU and IMF bailout to be reduced, in line with the easier terms granted to Greece last Friday.

The German minister was recalling a clash between Irish Prime Minister Enda Kenny and French President Nicolas Sarkozy on the issue at last week\’s eurozone summit that is sure to be revisited at a full European Union summit next week.

"This can\’t stay like this," Schaeuble said of Ireland\’s 12.5-percent corporate rate, one of the EU\’s lowest, adding that US Treasury Secretary Timothy Geithner had complained during a conversation that too many American companies choose to base themselves in Ireland for tax reasons.

"Solidarity is not a one-way-road," Schaeuble added after talks among EU finance ministers in Brussels.

Rehn also urged Dublin to take a "constructive" approach to plans aimed at for a single business taxation regime across Europe.

The issue will return on Wednesday when the EU\’s taxation commissioner Algirdas Semeta puts forward new EU-wide tax proposals.

Rehn noted that the tax issue was not part of Ireland\’s 67.5-billion-euro international bailout agreed with the EU and International Monetary Fund in December.

At the same time, however, he acknowledged "some relation" between the tax stance and Ireland\’s failure to secure a one-percentage point reduction in the interest rates it pays on its rescue package, as did Greece.

Advertisement. Scroll to continue reading.

"It is very important the EU works further on tax coordination," Rehn said, adding that Semeta\’s proposals for a Common Consolidated Corporate Tax Base were "very reasonable and gradual … in terms of harmonising tax systems across the EU.

"I would only encourage a constructive approach by Ireland on policies related to taxation, especially the commission\’s proposals on CCCTB," Rehn said.

In the works for the past 10 years, the plan would allow companies to use a single EU tax regime to calculate taxable profits instead of having to deal with different national systems.

Ireland\’s low corporate tax rate helped to fuel growth in what was once known as the Celtic Tiger and the Kenny\’s government says that level must be maintained to help its recovery from the financial crisis.

But partners see it as unfairly low. The average corporate tax rate in the 17-nation eurozone stands at 25.7 percent. It is 34.4 percent in France and 29.8 percent in Germany — although Irish critics say a generous system of allowances in those countries means the headline gap in rates is wholly misleading.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...