Poor countries are being robbed of tax revenue and Ireland is not doing enough to stop the theft, according to six leading global development organisations.
At a Dublin launch of a new book on the issue, Driving the Getaway Car? Ireland, Tax and Development by Dr Sheila Killian of the University of Limerick, the organisations demanded that Ireland act urgently for global tax justice.
The book explains how impoverished countries lose billions of euro through weak domestic tax collection and unjust international tax structures.
Transfer pricing abuse – where multinational companies set prices of goods and services through subsidiaries to minimise their tax bills – is highlighted as a particular area of concern.
Nessa Ní Chasaide of the Debt and Development Coalition said that the book “demonstrates that impoverished countries are being stripped of billions of euro every year due to an unjust and elaborate international system that enables tax avoidance and evasion.
“Our message to the Irish government is that impoverished countries are clearly being robbed, and it needs to ensure Ireland doesn’t become the getaway car.”
Dr Sheila Killian highlighted the fact that “Ireland’s tax model clearly does not do enough to protect vulnerable countries from tax revenue losses.:
She strongly suggested that Ireland “should adjust its transfer pricing regime to properly protect impoverished countries from losing tax revenue, and close domestic tax loopholes, especially in the area of patent royalties, that may facilitate capital flight from impoverished countries.”
Colin Roche of Oxfam Ireland echoed the call to help poorer countries protect tax revenue “that is rightfully theirs” and urged multinational companies to be more transparent in their financial reporting.
He added: “We call on the Irish government to support the creation of a new financial reporting standard that requires multinational companies to report on their profits and taxes on a ‘country-by-country’ basis. This would provide vulnerable countries with an important new tool to expose tax evasion.”
