When the full text of the 2022 budget is finally published, it will be thousands of pages long, spanning dense, often impenetrable legalizations, filling several volumes. In terms of sheer size, it will make even the longest works of a Tolkien or Tolstoy look like a pamphlet, though it will certainly be of far less literary value.
Resolving the annual budget is arguably the most demanding task the state faces each year, requiring thousands of hours of work by many hundreds of employees in every single department.
Even so, the full text of this week’s budget is likely to be overshadowed for decades to come by just two words, “at least,” which our governments and governments around the world have been talking about at the highest levels in recent months.
Last week, the government finally agreed to join the group of 136 nations that approved the Organization for Economic Co-operation and Development (OECD) proposal to set a “global” corporate tax rate of 15 percent for businesses.
In approving the international tax pact, the Irish government has finally abandoned its estimated corporate tax rate of 12.5 percent and taken a concrete step to end our well-earned reputation as a tax haven once and for all.
While the government had previously agreed to take advantage of some of the more blatant tax avoidance programs of the multinationals operating here – for example the so-called “Double Irish” scheme – our corporate tax rate of 12.5 percent was still the subject of much criticism from our trading partners and economic allies.
The French in particular were outraged by the continuation and it was not for nothing that the then US President Barack Obama – a well-known fan of our small nation – demonstratively described Ireland as a “tax haven” nine years ago.
He later pulled the charge back, but when a liberal icon like Mr Obama thinks you are up to something dubious, you know you are in trouble.
So it came about that last week the cabinet agreed to approve the OECD agreement with a very important reservation. Originally, the tax pact called for a global corporate tax rate of “at least 15 percent”, which our government – for fear of further increases – could not live with.
Months of intense lobbying have resulted in the removal of the controversial two words, meaning Ireland can now “take its place among the nations” again when it comes to corporate taxation.
In terms of our economic development, the words “at least” now have an extremely important meaning for Ireland. You have helped to bring us out of the cold among our international partners and to give a certain degree of security for our economic policy in the future.
As we recover from the effects of the Covid pandemic and prepare for the effects of the rapidly deteriorating post-Brexit EU-UK relationship, Ireland needs all the allies it can get.
Whatever the budget, the government has done well in that regard, at least.