Ireland's low rate of corporate tax has surfaced as an issue in the lead-up to the election campaign with charge and counter-charge between Fianna Fáil and Labour over their respective positions in the European Parliament.
Ireland's 12.5 per cent rate is widely regarded as a cornerstone of current economic prosperity. A claim by Minister for Finance Brian Cowen last week that Labour could not be relied on to protect the low Irish rate against moves for tax harmonisation in the European Union was rejected by a Labour spokesman as "typical Fianna Fáil distortion".
Fianna Fáil followed up Mr Cowen's remarks with a statement from its Dublin MEP, Eoin Ryan, who criticised Labour MEP Proinsias De Rossa for voting in favour of moves by EU tax commissioner Laszlo Kovacs to promote a common EU tax base for businesses.
Mr De Rossa responded that on January 19th last, all Fianna Fáil MEPs supported a Common Consolidated Corporate Tax Base (CCCTB) proposal in a roll-call vote on the Vlasto report on Implementation of the European Charter for Small Enterprises.
Labour also called on Fianna Fáil to explain Munster MEP Brian Crowley's vote in favour of a European Parliament resolution last November 14th on the 2006 Annual Report on the Euro Area, Paragraph 12 of which promoted a CCCTB in Europe by enhanced co-operation.
A spokesman for Fianna Fáil in turn accused Labour of attempting "a complete try-on" because enhanced co-operation meant that eight or more EU member states could move in a particular policy direction, "but that does not mean for one moment that this direction would be implemented in Ireland or thrust upon Ireland".
The Fianna Fáil spokesman continued: "Brian Crowley is not in favour, and nor are the Fianna Fáil MEPs of the setting up of a CCCTB in Europe. This is because the setting up of CCCTB will mean in time that the EU will be able to set our corporate tax rates."
Labour had sought "to give the distinct impression that there was a single vote on Paragraph 12 of the 2006 Annual Report for the Euro Area. This was not the case but there was a vote on the overall report."
A delegation from Fianna Fáil and representatives of the Irish business and banking sectors are meeting Mr Kovacs in Strasbourg tomorrow to lobby him against his plans for CCCTB.
