Mr. Angel Gurría:

Concentration is a result of success because Ireland has been able to attract many large companies. It is not a problem if the companies pay their fair share and should not be a problem if everybody is dealt with in the same way. If Irish small and medium enterprises and large corporations know they are being charged 12.5% on their profits, the country will have a level playing field. The problem arose when there was a perception that while Ireland was taxing companies 20% and subsequently 2.5%, some companies were paying 2% or 0% tax under sweetheart deals. The clear view of the OECD is that we do not take a position on countries' overall tax number or level provided it is applied to everybody. If a country can make its economy work and make ends meet by applying a corporation tax rate of 0% or 9%, as some eastern European countries do, or 12.5%, as Ireland does, that is fine. Our threshold is that everyone must be treated the same. We do not believe a country that can make its economy work with 12.5% taxes is doing anything wrong or intrinsically taking competitive advantage.

We have been advocating that a number of the highest taxed countries reduce their taxes. The global trend is to lower corporate taxation, which is hovering around an average of between 20% and 25%, with few countries still applying a rate of 30% or more. Taxes on wages and labour, known as the tax wedge, are also reducing, although the wedge in some European countries is still higher than 50%. We also advocate compensating for the losses arising from the reductions in these typical taxes through better collection - the Deputy just referred to a figure of 16% - but also through property and green taxes.