Ireland’s second-largest opposition party backs a “small increase” in the country’s corporate tax rate as a sign that Dublin’s long-standing political consensus on multinational corporations is being broken after the G7 agreed to the plan. Global tax reform,
Ireland’s long-term tax rate of 12.5 per cent is crucial to its success in attracting perennials. But Dublin now faces a serious challenge after a group of G7 leaders approved a 15 per cent global minimum wage this weekend.
Irish Labor Labor spokesman Gad Nash told the Financial Times that he was calling for a “national conversation” about possible growth.
“It simply came to our notice then [in Ireland’s corporate tax rate] “It’s something I believe we can live with,” Nash said. He added that although “we are not even close to that” because the EC EC has not yet agreed on a global deal, “the first thing we need to do is start a political agreement here in Ireland.”
Nash said he would raise the issue with Irish Finance Minister Pascal Donojo in parliament next week.
“The minister must present to parliament what options there are for Ireland,” Nash said. He added that the opposition should be given enough information to consider the pros and cons of minimizing Ireland’s corporate interest rate globally or defending the existing tax, which all political parties have long supported.
If a global agreement is reached on a rate higher than Ireland’s current collection rate, Dublin decides not to apply it, other countries may withdraw the remaining tax revenue under the plan in question. Some observers have warned that this will not be politically acceptable in Ireland.
Ireland collects almost € 12 billion a year in corporate taxes, up from about € 57 billion in total taxes. In: report: The Dublin Institute for Economic and Social Research, published last month, warned that higher tax rates could hurt Ireland’s small and medium-sized businesses, which employ about two-thirds of the country’s workers.
“The 12.5 percent tax rate has become almost an article of faith in Irish politics,” said Gary Murphy, head of the Dublin City University School of Law and Government. Even Sinn Fein, the largest opposition party on the far left, has been cautious about raising it.
But on Tuesday, Pearse Doherty, Sinn Féin’s finance spokesman, told the FT that while he was not “in favor” of raising the Irish tax rate, he asked the Treasury to make a detailed analysis of whether it was “in Ireland’s best interest”. Accept a 15% interest rate exclusively for multinational companies; is such an event possible?
He also wanted to see a simulation on raising the corporate tax rate “at the whole level” and keeping it at 12.5%. He said. “It simply came to our notice then [international negotiation] with open eyes. “
After the G7 meeting on Saturday, Donohoe told reporters that he would continue to “sue for legal tax competition.”
An Irish government official told the FT that while Dublin wanted to support the 12.5 per cent interest rate, “it would be difficult for Ireland to withstand” the increase if the US fell behind the world minimum of 15 per cent.
The Irish Treasury Department estimates that Dublin could lose € 2 billion a year from corporate tax reform, although Donoho stressed on Saturday that possible spending had already been incorporated into Ireland’s economic forecasts. The board declined to comment except on the minister’s statement.
Negotiations are underway in 139 countries at the EC EC in Paris with the aim of reaching an agreement later this year.