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Minister says Ireland will retain control over corporation tax rates

Minister for Finance and Public Expenditure and Reform Paschal Donohoe
Minister for Finance and Public Expenditure and Reform Paschal Donohoe

The Minister for Finance and Public Expenditure and Reform has said the decision-making process around corporation tax will be protected by Ireland.

Paschal Donohoe was asked about the threat to Ireland following comments made by US President Donald Trump, and the French President Emanuel Macron who supports the setting of minimum and maximum corporation tax rates for EU countries.

Addressing the Oireachtas Committee on Budgetary Oversight, Mr Donohoe said "what is very important is that we are crystal clear on the nature of our competitiveness and the proposition that we offer for attracting and retaining jobs in Ireland.

"I am confident that despite the change that is taking place in other jurisdictions that Ireland will continue to have a competitive offering," Mr Donohoe said.

"President Macron is entitled to outline his agenda in relation to the future of the eurozone, and I'm equally entitled to outline what our national interests are in those areas.

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He added that "in relation to broad EMU and the future of the eurozone, I believe it is in the long-term interests of Ireland that we have a eurozone that is even more stable, continues to grow in the way it has in recent years.

"So strengthening the eurozone and the monetary union in Europe is in our interests.

"We believe the key way that can be done is through banking and capital union.

"In relation to corporation tax policy, the current decision making process in relation to that will be protected by Ireland" he said.

"We believe the principal of unanimity in relation to taxation matters is a core element of how decisions are made in all tax matters, not just corporation tax".

"And that will be the stance that I will continue to advocate," he added.

On the subject of Local Property Tax, the Minister said the Thornhill report into the tax had set out timeframes for making changes to the property tax system, and he would be adhering to those timeframes.

He said the Government was conscious of the potential for sudden tax increases by 2019, and any announcements he would make in the coming weeks would be about the process for dealing with that.

Asked about spending in the health service, Mr Donohoe said the Government needed to look at how more resources could be made available to it, but he said the health service has never had more money available to it, and the level of resources available to the HSE is at an all time high.

He said the total fiscal space available in the budget was €1.2 billion, but only €350 million of this remains to be allocated, with the rest already spoken for due to demographics, the action plan for housing, and public service pay agreements.

He also told Fianna Fáil's Michael McGrath that he did not anticipate any late changes to the amount of fiscal space available ahead of the budget. 

Minister Donohoe also said there will be a Brexit package in next month's budget.

He said he is not complacent about the level of challenge faced by the country because of Brexit, and the budget will have "a big Brexit focus".

Minister says he is transferring Diageo shares

Meanwhile the minister has confirmed that he is in the process of transferring shares in the drinks company Diageo into his wife's name.

He was responding to Sinn Féin's Pearse Doherty, who said he wanted to give the minister the opportunity to "say that he was not conflicted" in relation to decisions he would make around taxes on alcohol in the budget.

Mr Donohoe explained the background to how he acquired the shares to the committee.

"My wife did work for Diageo, she no longer works for them. As part of the time that she worked for them she received a number of shares. Because we're a married couple a portion of those were in our joint name.

"The matter was raised with me and I have taken them out of my name, or I'm in the process of doing that, and they will be in my wife's name," he said.

"They are part of the compensation she received when she was working for a company which she no longer works for, and it will have absolutely no impact whatsoever on any decision that I  make."

Mr Donohoe added that he "would never let any decision like that, or any interest like that" impinge on a political decision.

"But for the record I have not worked for that industry, and I declared those shares because its right and proper that I do so in compliance with all the legislation in the area," he said.