Ireland could pledge to raise corporation tax next week, says Donohoe

The government could decide next week to join the OECD deal and pledge to raise Ireland’s corporate tax rate by 12.5% ​​- but only if it gets draft changes agreement, said Finance Minister Paschal Donohoe.

Speaking on RTÉ’s Morning Ireland programme, Mr Donohoe said the government was awaiting a revised text of the deal proposed by the OECD. He said that would be looked into and the coalition would then decide on a response.

Mr Donohoe said the government could not sign an agreement without certainty on the future tax rate. The government wants the OECD to change the text from “at least 15 per cent” to just “15 per cent” because it fears the wording “at least” could lead to future increases in the rate.

The past few months have been intense for him, making the case for Ireland, he said, including this week when he took part in a meeting with G7 finance ministers, leaders of the economies the most powerful in the world. He said clarity still needed to be ensured about the OECD. “Next week will be critical, we will know where we are when we see the text,” he said.

Separately, Donohoe was evasive on the issue of bonuses for frontline public service workers, saying any such payments, if agreed, should be fair, inclusive and affordable.

“I want to hear the views of the people directly involved,” he said.

Mr Donohoe pointed out that the upcoming budget was being crafted by himself and Public Expenditure Minister Michael McGrath against the backdrop of a mounting national debt. A “large amount of money” would be borrowed this year, he said, and borrowing for day-to-day expenses would continue into next year.

He wanted to get to the stage by 2023 where borrowing was not needed for day-to-day expenses.

He confirmed that there would be an element of social protection and taxation in the budget. The €300 million tax settlement agreed by pharmaceutical company Perrigo would not change the parameters of Budget Day, he said. The Budget Day package would be worth less than 4.7 billion euros, he said. There was a huge deficit and a high national debt, the parameters of the budget did not include any individual transactions.