Sinn Féin - On Your Side

GDP figures show government failing to tackle tax avoidance - Carthy

13 July, 2016 - by Matt Carthy MEP

Sinn Fein MEP Matt Carthy has said the CSO’s GDP growth figures demonstrate that the government is not taking its obligation to tackle tax avoidance seriously. The CSO figures released this week showed GDP growth of 26.3% in 2015, more than three times the rate of 7.8% that was estimated in March.

Carthy, a member of the European Parliament’s Panama Papers inquiry committee, said: “Over the past 24 hours, economists around the world have responded to these growth figures by calling them farcical. Media reports indicate that the Central Bank governor has met with the CSO to express his concerns that the figures have little connection with real economic activity in this state.

“These figures are so detached from reality that they are cause for serious alarm. Per capita income has apparently risen to 130k in 2015, and we’re supposed to believe that the state’s industrial base has doubled in the past year. But the Net National Income grew by 6.5% in 2015 while consumer spending rose by 4.5%. These income and consumption figures are a far more accurate reflection of real economic activity and growth.

“Official GDP and GNP figures have a major and serious role to play in fiscal planning, spending and borrowing. They need to be credible and a measurement of real economic activity. One consequence of yesterday’s distorted figures is that the state will now be required to increase its contribution to the EU budget at taxpayers’ expense.

“Most alarmingly, the figures reveal a glimpse at the level of dubious accountancy tricks being played by multinationals in Ireland over the past year – a period in which the Irish government claimed it was committed to playing its part in the global crackdown on tax avoidance.”

Carthy continued: “The CSO identified relocations and inversions by multinational enterprises as the major contributing factors to the so-called growth. The transfer of financial assets and intellectual property patents into Ireland does nothing to actually create jobs or contribute to growth in the real economy.

“It seems as though there’s been a rush by multinationals to ‘turn Irish’ in the context of global action on tax avoidance and tax havens. Earlier this year, US President Barack Obama called inversions – where a multinational corporation changes tax domicile after it buys up a smaller Irish-registered company – an ‘insidious tax loophole’.

“Our credibility on tackling tax avoidance is taking a battering in the international finance media in light of this week’s figures. The government’s welcoming response is utterly irresponsible. An economic strategy based on providing a base for multinationals to avoid paying their fair share of tax is totally unsustainable”. ENDS

Connect with Sinn Féin