15% corporate tax hike ‘not inevitable’ – Donohoe
RAISING the corporate tax rate from 12.5 to 15 pc is “not inevitable”, according to Finance Minister Paschal Donohoe.
Ireland is among a small minority of countries that refuse to sign a preliminary corporate tax agreement with the OECD.
The Department of Finance said Ireland ‘fully’ supports parts of the deal, but has a ‘reservation’ on the 15% rate.
Despite reports that government colleagues are pressuring the minister to increase the current rate, he said raising it to 15% is “not inevitable”.
He said there was a lot of “ambiguity” and “uncertainty” in the current global tax deal, which won’t be finalized until October.
“The language that’s out there right now uses expressions like ‘at least’, which it says, and makes it very, very clear that there’s no inevitability as to what that number will be.
“What I do is defend our national interest,” he said.
However, he refused to rule out corporation tax going to 15%.
“We are one of the small groups of countries that have made the important decision not to participate in a global agreement and my commitment, at this stage, is not a matter of words but a decision that I have made. “
He said he is committed to protecting the rate.
He was speaking as the government launched its summer economic statement, which was delayed due to a row between Cabinet ministers over the budget for a new housing plan.
Housing Minister Darragh O’Brien is expected to launch the multi-billion homes for all plan in the coming weeks.
However, Public Expenditure Minister Michael McGrath declined to specify the budget figure for the plan, after ESRI said housing spending was to be doubled.
“It’s not just about the money, because we can see that even providing that money hasn’t resulted in the level of production that we would like and we recognize that Covid has had a really significant impact with a large part, the first half of this year, has been resulting in the cessation of construction. We have to consider capacity, the upper limit of what can actually be delivered next year, the year after,” he said.
Mr McGrath added that there must be a “significant” supply of private sector housing.