Terence Flanagan (Dublin North East, Fine Gael)

I welcome the comments of the Minister and I am delighted that there is full consensus in the House on the corporation tax rate. That is to be welcomed. I thank Deputy Noonan for bringing forward this important motion, which reaffirms the commitment of Dáil Éireann to the 12.5% rate for corporation tax.

This rate has been a great success for Ireland and much of the international investment in this country would not have occurred if the corporation tax rate had not been introduced. I am delighted that a Fine Gael-led Government introduced the rate in the mid-1990s. The objective should be for the tax rate to continue for the foreseeable future and there should be negotiation on it in the talks with the IMF. For that reason, the Minister's comments this evening are welcome and will put people's minds at rest.

Unfortunately, our economy is in serious trouble and our ship has hit rocks. There is much money leaving the country and that has to be made up with tax increases in the coming years. This is one area we cannot tinker with. The tax rate is a key ingredient for the export sector and the success of that industrial area. The quality of education is another issue and the Minister must consider that in greater detail at budget time to ensure the fewest number possible of cuts in education.

The last thing this country needs is bad news for the 1,000 multinational companies active in Ireland. Foreign direct investment creates thousands of jobs and it is a key factor. Businesses will leave the country if we do not protect what we have. IDA Ireland is charged with selling Ireland abroad and this is a key element on which this country is being sold on an international basis. We are the envy of Europe in this regard and we are under pressure from other European countries, such as Germany and France, which want the rate to be increased. We must be strong in this case in avoiding such action.

The United Kingdom has a corporation tax rate of 38%, China has a rate of 25%, Germany has a rate of 30% and the United States has a rate of 39%. We have a competitive advantage with this low tax rate. We must ensure it remains in place.

A recent statement by German Members of the European Parliament that Ireland's rate of corporation tax should double if the country borrows from an IMF-EU fund was unhelpful. It is the last thing the country needs. I am pleased the Minister has put to bed speculation in some newspapers today that a special bank levy would be imposed on foreign banks located in the International Financial Services Centre. Such a move would undermine the great work being done in the IFSC and result in a haemorrhage of jobs. We must not introduce a bank levy.

Commissioner Olli Rehn's recent statement that taxation rates are a matter for each sovereign government and the Commission will not put countries under pressure in this regard is reassuring. Nevertheless, we must avoid complacency if we are to ensure our low rate of corporation tax continues for the foreseeable future. Notwithstanding the proposed increases in income tax rates and the fact that everyone will be hammered because the country has been run into the ground, I welcome the consensus in the House on our corporation tax rate.

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