Department vows to fight any EU tax vote changes

The Department of Finance will continue to resist vigorously any move away from unanimity voting on taxation issues at EU level, the Oireachtas Joint Committee on European Affairs was told yesterday.

Ms Brigid McManus, assistant secretary within the taxation policy section of the Department, said Irish policymakers were "totally opposed to any change" to existing voting structures.

A move towards qualified-majority voting on taxation matters has been mooted repeatedly at EU level over recent years but has been rejected consistently by the Republic, along with Britain and others, that view it as a precursor to a one-size-fits-all taxation system.

The issue has returned to the fore over recent months in debate on the Convention for the Future of Europe.

Existing tax levels, particularly for business, mean that the Republic has one of the lowest tax burdens in the EU.

Ms McManus said Irish policy considered a common rate of corporation tax presented a "disproportionate" solution to problems created by varying taxation systems.

She acknowledged, however, that the issue was still live and was likely to reappear at the next intergovernmental conference.

Ms McManus said the Republic's opposition to a change in voting rules was absolute.

She dismissed a suggestion from Labour's Mr Ruairí Quinn that the Republic could champion harmonisation of the taxation base rather than of rates. Such a system would see all EU states adopt the same basis for taxation but would allow them to retain the right to set rates.

Mr Quinn suggested that the adoption of a more pro-active stance on taxation matters would help to counteract the "tabloidisation" of the Republic's opposition to other initiatives.

"It's very, very difficult to see how, once you started harmonising the base, you wouldn't open up the rates issue," Ms McManus said.

She also rejected the idea on the basis that the benefits it would carry were already achievable through implementation of rules on state aid.

Ms McManus said the Republic's position on taxation was based on sound democratic principles, including a state's right to choose its level of public spending and to decide how that should be funded.

"We want to preserve that asset by retaining its use at national level," she said.