Adams calls for end to FDI tax avoidance schemes
Sinn Féin President Gerry Adams TD today challenged the Taoiseach on the issue of sustainable Foreign Direct Investment and the potential loss of revenue to the state because of the use by multi-nationals of tax avoidance measures.
The Sinn Féin leader raised this issue on the same day that the EU Commissioner for Competition Joaquín Almunia announced that he intends to fully investigate tax loopholes in several EU states; and Ángel Gurría, secretary general of the Organisation for Economic Co-operation and Development (OECD) called on international technology companies to stop employing tax-dodging strategies. He also called on governments to make it more difficult for companies to get around tax laws.
Gerry Adams pointed out that today also saw the publication of an assessment of the Price Waterhouse Coopers World Bank Report on Paying Taxes in 2014.
The paper, by Professor James Stewart of Trinity College, revealed that as a result of deliberate tax avoidance by US multi-nationals and facilitated by the tax codes of this state, that American corporations are in reality only paying an effective corporation tax rate of 2.2%.
Gerry Adams said: “Sinn Féin’s concern is not about the 12.5% corporation tax rate. It is about the abuse of the international tax system and tax avoidance that is being operated by some multi-national companies in this state.
It is a fact that Foreign Direct Investment by US corporations employs around 100,000 citizens. These are important jobs providing significant income to families and communities and the state. But it is clear from the comments of the Secretary General of the OECD and by others that there is an increasing determination internationally to close tax avoidance loopholes.
It is clear therefore that the current system is not sustainable in the long term. The government needs to get to grips with this issue if current employment numbers dependent on FDI are to be maintained.
This means the government implementing tax fairness, including ensuring that all companies, big or small, pay the same corporation tax rate. “
The Sinn Féin leader also warned of the impact this practice is having on developing countries. In many instances the profits generated by the multi-nationals in those states are transferred through tax loopholes, and sometimes through Ireland, to the tax havens.
Teachta Adams said: “At last year’s Clinton Global Initiative in New York Mo Ibrahim, a Sudanese Telecoms owner made a plea that global companies should pay their taxes in Africa and said, ‘ All those big companies don’t pay taxes in Africa. That is just not acceptable’.
Gerry Adams called on the Taoiseach to take urgent steps to “close tax avoidance loopholes and restore our international reputation; to monitor the number and value of Irish registered but non- resident companies operating from this state and to ensure that this state is not used to funnel profits tax free out developing counties?