Dutch minister Jan Kees de JagerGoogle Images

Holland’s Minister for Finance has backed Ireland’s refusal to increase corporation tax in the wake of growing pressure from its EU and IMF bail-out bosses.

The Irish government has steadfastly refused to even discuss an increase in the 12.5 per cent corporate tax rate.

France and Germany have consistently called on the IMF and the EU to force Ireland to raise the rate on competitive grounds as part of the rescue plan for the Irish economy.

But the Dutch support, made public during President Mary McAleese’s state visit to the Netherlands, is seen as a major victory for the coalition government’s stance.

Minister Jan Kees de Jager has publicly backed Ireland’s sovereign right to decide its own tax rates, specifically the corporate tax rate.

He  told The Irish Times: “Direct taxation is a matter for individual member countries themselves. EU member states have a right to decide what level of taxation is appropriate in each individual area.

“That is why we do not specifically argue that the corporate tax rate should be increased in Ireland.

“It is a matter of national sovereignty whether or not to increase a specific form of tax, though, of course, the total level of taxation must be appropriate to finance government expenditure.”

President McAleese had already described the German and French demands to increase the corporate tax rate as a ‘nonsense’ during her visit to Holland.

Minister for Enterprise Richard Bruton, part of the official delegation accompanying the President, has welcomed the comments from his Dutch counterpart.

“All taxes are a matter on which individual governments have a right of veto,” said Minister Bruton.
“The 12.5 per cent corporation tax is an essential element of Ireland’s export strategy and it crucial to provide investors with certainty about taxation.

“We must explain this; it is not just a matter of beggar your neighbour.”

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