Minister for Jobs, Enterprise and Innovation Richard Bruton has said international companies who paid lower than the 12.5% in corporation tax were availing of legitimate tax reliefs.
He was responding to United Left Alliance TD Richard Boyd Barrett, who said in the Dáil yesterday that Ireland's effective corporation tax rate may be as low as 6.5%.
Figures obtained by Mr Barrett from the Department of Finance show that in 2010, companies in Ireland declared taxable profits of €61bn, and paid €3.9bn in corporation tax on those profits.
Speaking on RTÉ's Morning Ireland, Mr Bruton said that, for example, the tax relief for Research and Development could ensure a company's continued presence in Ireland.
The minister said if companies invested in R&D, they got a 25% credit which he said was very important for consolidating the future of these companies in Ireland.
He also said that, in some cases, profits that are reported in Ireland are sometimes earned overseas, which affected the overall figures.
The ULA said if companies actually paid 12.5% tax on profits, the Exchequer could raise an extra €4bn.
However, Mr Bruton said there was no reason to make changes to the corporation tax rate.
"There is no point in changing our tax code when we're seeking to encourage investment," the minister said.
"We want to consolidate the position of these companies.
"The reliefs that are offered are very clear and above board, and they are in areas such as research and development, where for very good policy reasons, we are seeking to consolidate these companies in Ireland."