Lisbon Treaty Why ICAI’s Council is advocating a ‘Yes’ vote
Author:
Jim Aiken
At its meeting in January Council took an unusual decision for the Institute, namely that ICAI would advocate a Yes vote in the Referendum being held on the Lisbon Treaty in the Republic of Ireland. Furthermore, we also decided to join the Business Alliance for Europe grouping being co-ordinated by IBEC.
We were discussing the issue on the prompting of my predecessor as President, Vincent Sheridan, who expressed concern about the implications for the Irish economy arising from a rejection of the Treaty.
Despite this being an unprecedented move for ICAI to take, there was no substantial disagreement around the Council table.
The question obviously arises as to whether a membership body like ICAI should take a position on an issue like this. We cannot purport to speak for all our members who are free of course to take whatever position they feel appropriate on the issue. It can be fairly guaranteed that, with over 11,100 members in the Republic of Ireland, some will oppose the treaty.
Rather Council saw the issue in another light. ICAI is a pro-business advocate. We are rightly proud of the role played by our members and our member firms in building Ireland’s recent economic prosperity. We take positions on a whole range of business issues. We make public submissions to Government consultations like the Small Business Forum or the Better Regulation Forum. Each year we produce a pre-Budget submission which advocates measures we believe will contribute to the economic betterment of our society through increased business activity. In Northern Ireland of late we have led the campaign for a reduced rate of corporation tax comparable to that operating in the Republic of Ireland. These are all political issues albeit not party political issues. The referendum on the Lisbon Treaty is no different.
Obviously, central to our decision was the issue of taxation. We have lobbied for a lower rate of corporate taxation in Northern Ireland because we believe that the lower rate has contributed hugely to the economic success of the south. It would be counterproductive for us to advocate a Yes vote to Lisbon if we believed it added to the momentum developing in parts of Europe behind the Commission’s Common Consolidated Corporate Tax Base initiative or, more particularly, damaged Ireland’s ability to oppose it.
Clearly, it does not. The unanimity required for changes in taxation are preserved in the Lisbon Treaty. The Government is to be congratulated for achieving this outcome. Ireland cannot be forced to adopt a taxation code against its will. The campaigning group, Libertas, has called for a rejection of the Treaty on the basis that we should not let Brussels set our tax rates. This is a dishonest campaign and unworthy of the group. There is also a misperception about that Europe is responsible for much of the red tape and regulation that afflicts business. Often Europe is a convenient scapegoat for what is wrong in this regard. But it is also the driving force behind positive developments. For example, the increases in the audit exemption threshold in recent years have been facilitated by European initiatives in this area.
ICAI has made its position clear on the CCCTB in a document published last year and available on our website. We believe that the CCCTB initiative is confusing and misguided. It will not achieve the objectives advanced by many of its keenest advocates. Rather it will add confusion and complexity to European corporate taxation and will impede the competitiveness of all European countries.
ICAI has taken the view that Ireland’s ability to argue against CCCTB will be enhanced by a Yes vote on June 12th. Chartered Accountants are practical business people. We understand the importance of maximising our negotiating position. Rejecting a treaty that has been agreed by all other member states, which in business terms at least poses no direct threats to our prosperity, would be a poor tactical decision.
No treaty signed off on by 27 countries is ever going to be perfect. But we are not being asked to determine or vote on whether Lisbon is perfect. The alternative to Lisbon is opening the door to further discussions and negotiations that may not go as well from our perspective and which can only add political instability to the economic instability that is already current in Europe. From ICAI’s perspective that makes no business sense and we have decided on this occasion to say so publicly.