A fair global taxation system?
Sir, – While much of the media attention on the G7 focused on how Ireland can continue to remain attractive for investment (“The Irish Times view on the G7’s move on corporate tax: Ireland must consider how it will remain attractive for investment”, June 7th), it is important to turn our attention to how the global taxation system disproportionately harms developing countries.
According to the International Monetary Fund, developing countries lose an estimated $200 million to $300 billion in tax revenues every year – far more than they receive in aid. Those “lost” funds could be available to Governments to provide essential services, such as access to clean water, healthcare, education, and many other services we can take for granted.
We applaud the recognition by the G7 that tax havens need to be made obsolete and that the right to tax profits ought to be fairly distributed across countries.
However, we view the G7’s announcement as a starting point for essential reform toward a fairer and more progressive international tax system. One that would allow developing countries to tax properly the companies that operate and generate profits in their countries.
As it stands, the main beneficiaries of the proposed new rules for a global minimum corporate tax rate of “at least” 15 per cent are the very same G7 countries – the world’s richest countries – where most of the world’s multinational companies are based.
Meaning that the benefits for the world’s poorest countries are marginal.
Irish people are renowned for their humanitarian values and global solidarity. In a time of unprecedented health and economic crises, it has never been more imperative that everyone, including huge multinational companies, pay their fair share so that countries can rebuild and recover.
In the words of the Global Alliance for Tax Justice (2021 Nobel Peace Prize nominees): “There is no enduring peace without social justice and no social justice without tax justice.” – Yours, etc,
Sir, – In Saturday’s article on Ireland’s position regarding the OECD-backed global tax rate, Minister for Finance Paschal Donohoe is said to have “confidence that multinational companies would remain in Ireland despite any change in the tax rate” (“Global tax rate: Ireland could lose €2 billion a year under proposed reforms, says Donohoe”, News, June 5th).
I wonder how a loss of €2 billion is then calculated?
Nowhere in the article does it mention that the second-most valued company in the world pays an effective rate of 0.05 per cent in Ireland, or that another made a sales income of €44 billion in the euro zone but paid zero corporation tax last year.
Increasing tax for corporations that can afford it would increase the Government’s budget, not decrease it.
It would more importantly create a fairer tax system in the eyes of those who, even as individuals, literally pay more than the world’s most powerful companies. – Yours, etc,