Cantillon: So is tax a moral or a business issue?

Patrick Coveney of Greencore.  Photograph: James Horan/Photocall Ireland

Patrick Coveney of Greencore. Photograph: James Horan/Photocall Ireland

 

Two of Ireland’s corporate titans waded into the debate on how much tax companies should pay at a recent meeting of the London Irish Business Society. Patrick Coveney (above) of Greencore and Tommy Breen of DCC had different views. For Coveney, tax was not a moral issue. It was a business issue and the primary responsibility of the people who ran those businesses was to pay as little as legally possible.

Coveney was particularly strident, claiming to be personally outraged that the people who put laws in place should then drag companies that comply with them across the coals. If they want a different outcome, they should rewrite the rules, he argues. It was much the same argument as that made by Apple’s chief executive Tim Cook when he was grilled by the US senate recently. The Greencore boss seems to have gone a bit further, though, saying that expecting business people to view tax as a moral issue was a “bit mad”.

In fairness to him he prefaced his remarks, according to the Sunday Business Post, by saying companies do have a responsibility to the communities in which they operate, but adding the caveat that it was limited to actions that ultimately benefited the business. This should come as no surprise to those still sore at Greencore’s decision to avail of EU compensation to close down the Irish sugar business.

Breen was more nuanced. The imperative for any company is to do right by its shareholders, he said, but acknowledged there was a conflict with the company’s responsibility to the community. Both men’s arguments stand and fall on the premise that taxation is a business issue and not a moral one. That argument can, has and will go on forever. But what is apparent from events of the past few months is that the public – otherwise known as the customers of Greencore and DCC – pretty much see taxation as a moral issue.

And they and their shareholders ignore that at their peril given that both companies carry out the bulk of their business in the UK while paying tax in Ireland.

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