Par for the course
The G8 summit, except on taxation, was always going to be more about building and maintaining momentum that staking out new ground or taking new initiatives. And so it was at Lough Erne – the leaders were knocking balls off the second or third tee rather than the first, with the heavy lifting par fives with their treacherous greens – reaching agreements – still far ahead. The rest of the course remains strewn with deep bunkers and water traps.
Russia and the US had already agreed to convene a Syria peace conference – the impossible challenge in Fermanagh for the seven leaders opposed to Assad was to push President Putin as far as possible into accepting an agenda that presupposed a transition to a post-Assad Syria. It really wasn’t very likely. In the end the summit statement merely spoke of the necessity for talks , but not of the need for Assad to step down, or any specifics about how any transiitional government would be made up. In truth, one very small step forward.
That there would be talks on a mega-EU-US trade deal – “the biggest bilateral trade deal in history”, the leaders called it – had been agreed. Expectations are that a deal could be worth €120 billion to the EU and €93 billion to the US. What it needs now, and it is to be hoped the summit provided it, is an injection of political determination, and political authority for negotiators, to embark on the expected two-year talks process through territory well guarded by powerful vested interests.
The G8 statement on taxation and transparency, however, does break some new ground in attempting to redress the balance of power between tax-avoiding multinationals and both national tax authorities and developing world governments. You can’t tax transations or produce that you are unaware of, and the G8 has set out some commonsense and uneceptionable rules that could help. But, without the binding force of treaties or international law, without the sort of institutional enforcement capacity of an EU-like body, such principles are at best worthy but aspirational.
The Government may well ask itself whether the following refers to Ireland’s company-friendly taxation: “Countries should change rules that let companies shift their profits across borders to avoid taxes, and multinationals should report to tax authorities what tax they pay where.” But, in truth, behind the seemingly simple words lie layer upon layers of complexity – does it apply to us? Who knows? And, as for implementing ....mañana, mañana.
The G8 shows a welcome and much more concrete approach, however, in the language it uses about making shell company ownership structures and beneficial ownership more transparent. It promises to publish national action plans to steer implementation of a new code, and pledges closer international co-operation. Why not a similar approach on taxation?