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Ireland urged to raise corporate taxation in exchange for financial aid

Ireland is under pressure from EU partners to raise corporate tax to ease its debt problems

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According to today’s Financial Times, French and German finance ministers in particular are keen to see Ireland raise its 12.5% corporate tax rate, with one unnamed official being quoted describing it as “almost predatory,”.

It is thought some EU officials believe any bailout would need to be accompanied by a tax rise in order to successfully get a grip on debt in the banking system, which has been effectively underwritten by the Irish government, and make a recovery sustainable. 

However a loan is needed of “tens of billions of euros” according to one estimate is required in order for the government to be able to prop up its banking system.

The Irish government appears resistant to calls to alter its business tax regime.
Yesterday Irish Deputy Prime Minister Mary Coughlan described the tax rate as “non-negotiable”.

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