Mattie McGrath (Tipperary South, Independent)

There is a significant financial and symbolic significance associated with our corporation tax rate, which has drawn tens of billions of dollars of foreign direct investment, much of it from the United States. This is attracting high-skilled activity in the high-tech areas, pharmaceuticals, biomedical industries and others. In my own constituency in south Tipperary, we are nearly the leaders in the pharmaceutical sector; my colleagues and I visited Merck, Sharpe & Dohme last Friday and the new extension to its facility, which will provide 100 or more high-tech jobs. That company has brought in significant investment from abroad.

Highly skilled activity is being attracted and the raising of the corporation tax rate or implementation of the common consolidated corporation tax base, CCCTB, is out of the question. The corporation tax rate is protected under many EU treaties and I have been told we have a veto on the matter. The last referendum in Ireland was on the Lisbon treaty and the matter had to be put to the people twice. When I was knocking on doors many people were concerned about this veto so I hope the promised laws will come about.

One of the essential pillars of our economic policy, which is critical to achieving growth, is the corporation tax rate. It would be counter-productive not only for Ireland but for the eurozone and European Union to interfere with it. As an open peripheral economy we must compete with larger and more central economies on mainland Europe, so we must be able to offer incentives. We are honest about the incentives in this country, unlike the French. The French Government and its president have turned the issue into a political football, airing inaccurate views about Ireland's tax model and how it compares with other European states. Those living in glasshouses should not throw stones and the French should examine their own tax laws. Whereas the headline French corporation tax is 34%, the effective rate paid by businesses is far lower, and some corporations, such as major oil enterprise Total, manage to pay no French corporation tax at all. It is a disingenuous and unfair process, and our Government must fight it at all costs.

A PricewaterhouseCoopers study for the World Bank indicated that France undercuts Ireland on an overall corporate tax burden, a fact about which we should be constantly cognisant. There appears to be growing agreement in Europe that tax harmonisation will eliminate competition and centralise activity when the opposite is necessary. Economic activity must be allowed to flourish across the EU and particularly in peripheral states. People in such states are already being punished and they should not also feel effects from a CCCTB. I strongly support the Government in its stance.

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