Minister says French views on tax 'off the wall'

COMMENTS BY France's finance minister about proposals for a common EU corporate tax plan are "off the wall" and made "from a position of some ignorance", Minister for Foreign Affairs Dermot Ahern has told the Dáil.

Christine Lagarde, addressing a conference in Brussels on taxation earlier this week, said France would push hard on its proposal for a common method of computing corporate taxes, when it takes up its six-month presidency of the EU.

The proposal could undermine tax competition within the EU, where Ireland's corporation tax rate is 12.5 per cent.

Labour European affairs spokesman Joe Costello complained in the Dáil and said French president Nicolas Sarkozy "should be remonstrated with" about Ms Lagarde's comments.

He also criticised EU tax commissioner Laszlo Kovacs, who is devising the proposal.

Mr Costello described their remarks as "ill-thought-out and ill-timed statements on tax harmonisation and the common consolidated corporation tax base".

The Government should make it clear to the commission "in no uncertain terms that some of the remarks of this nature are most unwelcome and inappropriate" while Ireland is considering the Lisbon Treaty.

Mr Ahern said, however, that "we cannot muzzle anyone nor would it be appropriate to suggest that people should be careful in making comments".

Speaking during a Dáil debate on the recent EU summit meeting, the Minister said "people are entitled to make statements".

He added, however, that "statements should be factual and the statement by the French minister for finance was off the wall. She was speaking from a position of some ignorance in that changes to taxation are catered for in the reform treaty. Our veto regarding taxation, alongside defence and the prohibition on participation in a common defence policy or military alliance, one of our red lines, will continue."

He also referred to comments by the Taoiseach that "the French minister for finance can pursue this issue for many a decade but she will not get anywhere because Ireland will use its veto. If the French wish to do something else with like-minded countries, that is their business, but Ireland and a number of other member states on the same wavelength as us will not participate."

© 2008 The Irish Times

This article appears in the print edition of the Irish Times