EU tax loopholes keep citizens in the dark
Sir, – For the past decade, a growing number of civil society organisations, trade unions and campaigners have called for greater transparency as a means of addressing harmful corporate tax avoidance. Sadly, EU proposals agreed in Brussels fall well short of expectations (“EU reaches deal to force multinationals to report profits by country”, News, June 1st).
The whole point of long-sought “county-by-country reporting” is to ensure public scrutiny of what taxes large multinationals are paying and where.
To tackle avoidance we first need to see where profits are flowing, but this badly watered-down EU deal is full of loopholes that will keep citizens in the dark.
Crucially, companies will only need to report country-level data for activity within EU states and a small, incomplete list of havens. Three-quarters of the countries in the world are omitted, rendering the exercise almost redundant. This is a transparency initiative which by design shines a light on only a tiny part of what matters – multinationals can easily maintain secrecy and shift profits to havens outside the EU like Bermuda or the Cayman Islands.
It is not just EU public budgets that will suffer. Christian Aid research has estimated that poorer developing countries lose over $400 billion per year to tax avoidance, siphoning away revenue that’s badly needed for healthcare and education. For comparison, this is more than double the yearly total given in official overseas aid across the world.
Ireland’s vocal opposition to even modest transparency measures is doubly disappointing for this reason – our hard-earned reputation as a voice for global justice and development is badly undermined by such stances.
Irish MEPs will get a chance to amend this deal when it’s sent back to the European Parliament in coming months and they must insist on real transparency. – Yours, etc,
Acting Head of Policy
Christian Aid Ireland,