Brian Cowen (Laois-Offaly, Fianna Fail)

I met Commissioner Kovács and his officials when he visited and spoke in the environs of the Dáil. I conveyed our opposition to the overall project and told him I was not at all convinced of the case put forward. The Commissioner is resigned to the fact he will not get agreement among all 25 member states, but he is prepared to go the route of enhanced co-operation. He proposes to publish a stocktaking communication shortly and it is expected that the current Austrian Presidency will put it on the June ECOFIN agenda to get an overall view from member states.

As stated, we oppose it for both principled and practical reasons. Taxation is a matter of national sovereignty for each member of state. The right to choose the level of public spending and the funding of such expenditure is a basic function of the democratic process. It is necessary to protect the flexibility of tax policy in rewarding enterprise and the creation of jobs and growth in the economy. There is no evidence to suggest a common, consolidated, corporate tax base would address issues such as competitiveness, compliance costs for companies, transfer pricing etc. It would not simplify EU tax issues as the so-called optional system proposed would add another tax system to the existing 25. The harmonisation of the base would lead to pressure on national tax rates and the code of conduct on business taxation already successfully addresses harmful tax competition.

The CCCTB cannot be imposed on member states. Unanimity is required on all decisions taken on taxation issues at EU level. We are happy to discuss how to deal with taxation issues on that basis and we have done so. Enhanced co-operation may only be engaged in as "a last resort" but we are a long way from such a position as a proposal must first come forward from the Commission. The timeframe it is talking about extends to 2008, which in our view is unrealistic, notwithstanding our strong opposition to the project — we feel the Commission may be down-playing the level of opposition among some member states.

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