Tax evasion in Ireland costs other countries $16bn a year

Report from Tax Justice Network ranks Ireland as ninth worst offender globally

Ireland is one of the biggest tax havens in the world, costing other countries almost $16 billion (€13.5 billion) in lost revenues each year, according to a major new report.

The UK-based Tax Justice Network, in its inaugural State of Tax Justice report published on Friday, ranked Ireland as the ninth worst offender in the world in terms of tax loss inflicted on other countries, and the fourth worst in Europe.

The report claimed to be the first study to measure thoroughly how much every country loses to both corporate tax abuse and private tax evasion.

It said countries are losing more than $427 billion in tax each year to international corporate tax abuse and private tax evasion.


Overall, $245 billion is directly lost to corporate tax abuse by multinational corporations, while $182 billion is lost to private tax evasion.

Tax lost by other countries due to Ireland was put at $16 billion, with $10 billion due to global private tax evasion and $6 billion from global corporate tax abuse.

The report said Ireland was responsible for 3.7 per cent of all global tax losses.

The only countries ranked worse than Ireland in the overall rankings were the Cayman Islands, the United Kingdom, the Netherlands, Luxembourg, the United States, Hong Kong, China, and the British Virgin Islands.

‘Haven score’

In terms of corporate tax evasion alone, Ireland was ranked as the 11th worst in the world, and the fifth worst in Europe. It scored a “haven score” of 76 out of 100, with 100 being the worst.

The only countries ranked worse than Ireland in the corporate tax haven stakes included the British Virgin Islands, Bermuda, the Cayman Islands, Singapore, the Bahamas, and Hong Kong.

The remaining four European territories ranked worse than Ireland were the Netherlands, Switzerland, Luxembourg and Jersey.

The report found that Ireland too suffers due to global tax abuse. In its case, the loss to the Exchequer from private individuals dwarfs that of multinationals. From a total of $14.5 billion each year, just $199 million is attributed to global tax abuse by corporations.

The total figure of $14.5 billion, it said, is equivalent to 22 per cent of Irish tax revenue, or a loss of $3,046 per member of the population.

In terms of the social cost, the report said it was the equivalent of 73 per cent of the health budget and 97 per cent of the education budget. The tax loss could also pay the salaries of 251,962 nurses.

Financial secrecy

In terms of global financial secrecy, Ireland was ranked 29th worst with a score of 48 out of 100. It was said to be responsible for 1.1 per cent of global financial secrecy.

The report’s key findings more generally established that higher income countries are responsible for 98 per cent of tax losses, costing countries around the world over $419 billion in lost tax every year.

Dr Dereje Alemayehu, executive coordinator at the Global Alliance for Tax Justice, said the report “captures global inequality in soberingly stark numbers”.

“Lower income countries lose more than half what they spend on public health every year to tax havens – that’s enough to cover the annual salaries of nearly 18 million nurses every year,” he said.

“The OECD’s failure to deliver meaningful reforms to global tax rules in recent years, despite the repeated declaration of goodwill, makes it clear that the task was impossible for a club of rich countries.

“With today’s data showing that OECD countries are collectively responsible for nearly half of all global tax losses, the task was also clearly an inappropriate one for a club heavily mixed up in global tax havenry.”

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter