04 OCT 2010
By Valentina Pop | EUobserver
With its record budget deficit, Ireland will not be able to keep its low taxes and will become a "normal tax country in the European context," economic affairs commissioner Olli Rehn said Friday (1 October), prompting an angry response from large American corporations based on the island.
"It's a fact of life that after what has happened, Ireland will not continue as a low-tax country but rather it will become a normal tax country in the European context," Mr Rehn said at a press conference following an informal meeting of finance ministers.
He was answering a question regarding the inclusion of Ireland's rate of corporation tax in efforts to increase tax revenues. But he also stressed that the matter was for the government and parliament to decide.
Ireland is struggling to reduce its budget deficit to 3 percent of its gross domestic product by 2014, after it emerged that bank bailouts have widened the public deficit to a massive 32 percent of GDP.
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