‘There’s A Deeper Issue Here’

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Sinn Féin spokesman Pearse Doherty

Further to the announcement from Finance Minister Michael Noonan that Ireland must pay an additional €280million to the EU next year – because of the recent GDP growth of 26.3%, as recorded by the Central Statistics Office…

Sinn Féin TD and finance spokesman Pearse Doherty and Stephen Collins, political editor of The Irish Times, spoke on Today with Seán O’Rourke about the development.

Seán O’Rourke: “Pearse Doherty, are you assured by a comment from the Public Expenditure  and Reform Minister Paschal Donohoe on Morning Ireland, saying that bill has to be met, as a result of our EU membership, it will not influence the spending plan for Budget 2017.”

Pearse Doherty: “Well, Minister Noonan actually provided me with this figure on Tuesday, €280million additional and made that point that it doesn’t affect our fiscal space. And this is about just how the rules are applied and the fiscal space has been agreed in April and therefore it’s set. It will have an impact next year and that’s where we need to actually tease out how we calculate the fiscal space for next year. But I think there’s a deeper issue here and me in Sinn Féin and myself, in particular, have been challenging the previous government on this, since 2013. Our economic, the way we calculate our economy is absolutely broken, it’s bust in this country. It’s been a way out for quite a long number of years. We all agree that the 26% isn’t real, but neither was the 7% that we were suggesting was happening last year as well because the same type of factors were at play. At a lesser extent.”

“But the fact that we’re actually paying more to the European Union budget as a result of this year isn’t something new. I have figures going back to 2010, as a result of redomiciled plcs – these are companies  that were domiciled in Ireland but don’t pay any tax here. And the actual additional contribution that we had to pay to the EU budget every year, because of that average, between €45 and €60million per year. So this is something that’s been going on, over and over again. In 2014, when we started to, we raised our GDP figures because of the activities of illicit trades that’s, you know, prostitution, drug sales and all the rest which gives us a bump in GDP, we actually had to pay €6.5million to the European contribution.”

Meanwhile…

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Yesterday.

In the Dáil…

Anti-Austerity Alliance-People Before Profit TD Richard Boyd Barrett raised the €280million bill after he asked why the Government recently opposed an EU proposal to begin country-by-country reporting of corporation tax by large multinational firms.

He was speaking during a debate on corporation tax.

From the debate:

Richard Boyd Barrett:A few weeks ago, the Government opposed an EU proposal to introduce public country-by- country reporting of corporation tax for large multinational companies on the spurious grounds of subsidiarity. Are we going to bring in public country-by-country reporting ourselves?

Mary Mitchell O’Connor: “Last April, the European Commission adopted a proposal for a directive to introduce public country-by-country reporting of corporation tax by large multinational enterprises.Since then, my Department has been considering the detail of the proposal and consulting with stakeholders. The Department also ran an open consultation in the course of last May. The task of assessing the proposal is continuing and, at EU level, the negotiations have begun. Although they are at an early stage, it is clear that the proposal raises a number of practical, legal and technical issues. These will need to be addressed over the coming months. Until we know the scope and content of any final EU measure, it is too soon to consider national measures on this type of public reporting. However, Ireland is already to the fore in introducing similar reporting obligations for large multinational companies. Under the Finance Act 2015, certain Irish-resident parent companies and subsidiaries of non-Irish companies must file a country-by-country report on tax with the Revenue Commissioners each year. The first of these reports are due to be submitted to the Revenue by the end of next year. Several countries, including the US and all EU member countries, have committed to introducing this form of country-by-country reporting and to sharing the information among their tax authorities.”

Boyd Barrett: “The Minister may have heard this week that we are already paying a big price because of aggressive tax avoidance by multinational corporations. We will have to pay an extra €280 million to the EU this year because of the artificial inflation of the growth figures. Already, even before that, our contribution to the EU is grossly inflated and distorted because it is, in proportion to population, double that of countries such as Portugal and others due to the tax avoidance strategies of multinationals based in this country. It is in our interests to have public country-by-country reporting of the big multinational companies to stop them engaging in aggressive tax avoidance. Yet, incredibly, when offered the opportunity to do that by the European Union, we used the spurious excuse of subsidiarity to reject that proposal. What the Minister seems to be saying is that we cannot do it on our own. I agree with that, but why the hell did we not sign up to a pan-European proposal to do it, instead saying that we could not sign up to it because it infringes our sovereignty? It does not make any sense.”

Mitchell O’Connor: I reject tax avoidance. We cannot do it on our own. If we were to publish the figures the Deputy is referring to, it would allow some companies to gain a possible commercial advantage over others because matters would be deemed to be commercially sensitive. Other jurisdictions might not share the information with us if they knew we were going to publish the reports. It would not help the tax transparency agenda and a system of country-by-country reporting. I cannot do it.

Acting Chairman (Deputy Catherine Connolly): I thank the Minister. That brings Question Time to a close, and we are moving…”

Boyd Barrett: “There are 21 seconds remaining.”

Connolly:We are moving on. I asked for the Deputy’s co-operation. I have three different clocks here. I am going to move on to Topical Issues.”

Listen back to Today with Seán O’Rourke interview in full here

Dáil transcript via Oireachtas.ie

Previously: How Much?

23 thoughts on “‘There’s A Deeper Issue Here’

  1. Fact Checker

    The CSO found an extra €40 odd billion in GDP last year due to what a few firms did with their balance sheets.

    The Revenue took in €2.3 billion in corporation tax over and above what was expected (that’s 50% more).

    I am in the realm of speculation (as are all of us) because of the confidentiality with which the CSO and Revenue must treat the data.

    But I would be HIGHLY surprised if there was not a link between the two.

    1. b

      The Revenue took in €2.3 billion in corporation tax over and above what was expected (that’s 50% more).

      these things are somewhat related to the EU bill above you know?

      1. Kieran NYC

        Some people just want to be angry at everyone, all the time. They don’t really care why.

  2. dav

    blushirts – legally fighting the EU so Apple doesn’t pay more tax in ireland – keeping the tax dodging recovery going

  3. Paddy

    If Mary Mitchell O Connor very loses her seat, she’d could take up a job as ventriloquist

  4. Eoin

    Draghi is printing billions and blowing on keeping the Euro banks alive. 150 billion to the Italian banks most recently for example. He’s buying up everything available to protect the banking system. Does THAT appear on GDP? Remember that money printing is a form of stealth tax. It devalues the currency. Less buying power of your Euro the more there are in circulation. The amount of money Draghi prints and spends makes a mockery of our GDP calculations. We’re all in a tizzy over 280million tax bill while he prints and blows billions of Euros behind the scenes on zombie banks and nobody says anything? It’s utter nonsense. And the nonsense will become blatantly apparent to us all once Deutsche Bank pops and pulls the entire banking system down with it.

  5. Fully Keen

    We launder money for the world.

    We can’t complain when it bites out bum bum.

    We like gravy or we don’t.

    Like our stance on manufacturing for armies invading countries and killing thousands and our “neutrality”.

    We are an odd little island.

  6. jake38

    There is no doubt Pearse “LSE” Doherty and Richard BB would be much happier living in a socialist nirvana with a spectacular economy such as maybe Venezuela or maybe North Korea. Who will join me in crowdsourcing a one way flight?

    1. ahjayzis

      Bullsh1t

      You’re just deflecting from the fact Fine Gael are secretly building concentration camps and gas chambers and have all but fleshed out their plans to invade Poland.

    2. catherine

      That really clarifies things, attacking some other bunch of gobshites as a response to leprechaunomics?

  7. Junkface

    Ireland needs to be more honest about its corporation tax system. Its doing more harm than good. The wealthiest companies and billionaires in the world are profiting from this, while middle class societies deteriorates. The wealth gap is getting bigger everywhere, but especially in Ireland. A generation of college graduates seem to be expected to intern as slaves for years, no chance of buying a home, renting a home is also close to impossible. €280 million could have paid for a thousand much needed homes here.

  8. Junkface

    Irish economics can be more socially minded as well as capitalist. Its doesn’t have to be one or the other. You need both to progress in the modren world.

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