The Taoiseach has pledged to continue to cut corporate and personal tax rates in Ireland, telling business people in South Africa that this was the way to stimulate business activity.
Addressing Irish and South African business people in Johannesburg, Mr Ahern said the EU was now "off my back" on the issue and that low corporation tax would continue. Referring to business and personal taxation, he said: "We have cut taxes and we are going to continue doing it."
Rejecting objections from some EU member-states to corporation tax cuts, he said: "Some of our bigger brothers and sisters with high taxes in the European Union haven't done that well."
EU member states with higher corporation tax rates believe the phased reduction of Ireland's corporation tax rate from 50 per cent to 12.5 per cent in 2002 is giving Ireland an unfair competitive advantage.
Mr Ahern, however, said the Irish policy was very successful. "Corporation tax was 50 per cent and is now going down to 12 1/2 per cent; capital gains tax was 40 per cent and is now 20 per cent; the top rate of personal tax was 65 per cent and is now 42 per cent. By reducing the rates we've more than doubled the take. High rates of tax are a disincentive to business activity and we are going to continue doing that."
Mr Ahern was speaking to 120 business people. Only five of those present were not white, reflecting, according to the Africa Development Manager of Enterprise Ireland, Mr Frank O'Conor, "the reality of post-apartheid South Africa".
In his speech, Mr Ahern attributed Ireland's economic success of recent years to a number of factors including EU membership, success in attracting foreign direct investment, budgetary discipline, social partnership and the development of trade.
He said he believed the trade mission to South Africa was part of a new phase in the commercial relationship between the two states. Irish and South African companies could develop "mutually beneficial partnerships" in areas such as software technology, international consultancy, the pharmaceutical and healthcare sector and the food and drink industries.
Later, the Taoiseach witnessed the signing of five contracts between Irish and South African businesses. These include an agreement in which the Irish company ERA Maptech will supply satellite mapping services to the giant mining company Anglo American.
Another major South African corporation, Labat - run by the former Minister for Defence, Mr Joe Modise - is to market technology products produced in Ireland by Buytel.