Fianna Fáil Spokesperson on Finance, Michael McGrath has said that Minister Paschal Donohoe must be prepared to veto the much touted EU wide Digital Tax proposal. His comments come as the European Commission prepares to roll out a 3 per cent digital tax proposal at next week’s meeting of Finance Ministers.

Deputy McGrath said that “The principal concern is that this tax would represent a dangerous precedent and would lead to tax harmonisation by the back door. This would clearly undermine the Lisbon Treaty which was voted on by the people of Ireland. Taxation is a national competence and must remain so.

“It has been clear for some time that certain Member States have targeted our competitive corporate tax policy and have used either the Common and Consolidated Corporate Tax Base (CCCTB) policy or the Digital Tax to undermine Ireland’s sovereignty.

“The Digital Tax plan will target revenue earned rather than profit and will reward larger countries at the expense of smaller ones. This proposal is purely political in nature and only serves to chip away at the sovereignty member states currently have on taxation issues. The process underway at OECD level offers a far more constructive pathway to dealing with digital companies.

“What is really worrying now is that there seems to be an acknowledgment from all sides that EU support for Ireland’s position in Brexit negotiations will be conditional on Ireland softening its position on corporation tax. This idea needs to be dismissed immediately as there can be no quid pro quo when it comes to Brexit.

“Minister Donohoe must make it crystal clear at next week’s meeting that Brexit must not be used to blackmail Ireland on corporation tax and that Ireland is prepared to use the veto to stop this latest attempt by the Commission to undermine the sovereignty of individual member states over corporate tax”, concluded McGrath.