Libertas.org

 

Tax has become a critical and controversial issue in this referendum campaign, with a lot of confusion amongst the electorate on the implications of the Lisbon Treaty for Ireland's tax position.

Libertas agrees with the Government that all decisions at the council of Ministers in relation to taxation issues must be agreed unanimously. In that sense, dick Roche is correct when he says that Ireland retains a tax veto.

Where we disagree with the Minister is on how effective that veto will be, - for example, let's look at article 113 of the Lisbon treaty:

"The Council shall, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, adopt provisions for the harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation to the extent that such harmonisation is necessary to ensure the establishment and the functioning of the internal market and to avoid distortion of competition."

Look at that article closely. They key word is the third one – "Shall". This means that the councils is in fact obligated to enact provisions for the harmonisation of taxation is some areas, - and must do so "to avoid distortion of competition".

If the council fails to do so, due to Ireland's veto, the European Court of Justice could easily force us to comply, over-riding our veto.

Alternatively, under the enhanced co-operation procedures, a group of countries could proceed with the implementation of destination taxes, meaning that taxes would be charged based on where goods are sold, rather than where they are sold from. This would effectively end Ireland's corporation tax advantage.

These issues are of grave concern, and have not been addressed by the Government or the "Yes" campaign.

As such, we urge people to reject the Treaty, and ask for a specific protocol on tax in order to protect Ireland's corporate tax advantage.