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Further to Oxfam’s report on tax havens, which cited Ireland as the ‘6th worst corporate tax haven’ in the world.

Stephen McDermott writes:

In light of the report from Oxfam, I thought it might be worthwhile drawing your attention to a piece I wrote for this month’s Village magazine [link below].

As Oxfam International continues to call for multinationals to pay more tax, it is engaged, interestingly, in practices in the UK which one commentator has described as looking “remarkably like tax avoidance“.

Furthermore, as a member of the Irish Charity Shops Association, Oxfam Ireland has previously lobbied for further reductions in its own tax here.

In response, Oxfam Ireland have since claimed that the “positives of reducing a charity’s tax/rates liabilities [sic] are obvious”.

Some might argue that Oxfam would say that, but perhaps you’ll let your readers decide for themselves….

FIGHT!

Oxfam: Hypocrites Or Pragmatists (Stephen McDermott, Village magazine)

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5 thoughts on “Heal Thyself

  1. Ferret McGruber

    Oxfam replied to this article 7 days ago. I think, for the sake of balance, this should have been included on your page alongside the above. (See below):

    Oxfam Ireland • 7 days ago

    The above article is concerned that Oxfam may have ‘opened itself up a front for criticism’ while highlighting the devastating human cost of tax dodging by wealthy individuals and big corporations in developing countries, part our global campaign against economic inequality.

    Please be assured that this is not the case. We manage our own shops and pay all our tax.

    We expect to be held up to the highest standards, and we welcome scrutiny. We were not approached for comment. If we had, we could have informed you that our shops in the Republic of Ireland and Northern Ireland pay commercial rates as set by local authorities, with the exception of one (Sligo County Council doesn’t charge charity shops commercial rates). Indeed, the rates charged to charity shops in the Republic of Ireland are no different than those charged to commercial retailers. We also pay property tax where applicable.

    It should be no secret or surprise that the Irish Charity Shops Association, of which we are a member, publicly campaigns to have the burden of rates reduced for charitable organisations. After all, there are fundamental differences between the largely volunteer-run charity shop and where the money it brings in goes compared to the commercial retailer next door. Reduced rates would mean more funds for the vital services provided by charities. In our case, for example, it allows us to deliver clean water and other life-saving aid to people in conflict zones and provide the vital training and support that lifts people out of extreme poverty.

    Our shops pay VAT in the Republic of Ireland and Northern Ireland on the new goods we sell such as Fair Trade gifts and Christmas cards (VAT is not charged on donated second-hand goods). We, like every other charity in Ireland, pay VAT on the goods and services that are necessary to our operation (charities in Northern Ireland can claim back VAT on certain goods and services).

    Separately in relation to our UK counterpart’s shops, the article repeats claims made in a blog post by Richard Teather on the website of the Institute of Economic Affairs. This post was classic case of smoke and mirrors, using partial information to make a case against Oxfam where none exists. The fact is that Oxfam in the UK and elsewhere is very careful to comply not just with the letter of the law on tax but also the intention behind it. Both the donation of profits from Oxfam Activities Limited via the Gift Aid and the Tag Your Bag scheme follow approaches specially approved by the UK’s HM Revenue and Customs guidance. The purpose behind Gift Aid, after all, is to allow people in the UK to reallocate some of their own tax to causes they care about.

    Charities in Ireland have long campaigned to reduce the ‘tax back’ threshold for donors (currently €251 in donations per annum) and each year ask their supporters (who are making donations from income which has already been taxed) to fill out ‘tax back’ forms.

    There are fundamental differences between the exemptions sought by charities compared to big business – billions of euro from rich individuals and companies lost to government coffers compared to more modest amounts being re-directed from the tax take to support charitable work with similar ‘public good’ objectives, i.e. socially beneficial activities.

    The positives of reducing a charity’s tax/rates liabilities are obvious. The beneficiaries of reduced tax bills for multinational corporations and billionaires are in rather different circumstances.

    1. Sam Maher

      The response by Oxfam is itself ‘smoke and mirrors’ – not directly addressing any of the points raised in the article. The original article, which actually seems quite favourable towards Oxfam, simply warns of the hypocrisy of telling people what they should do while following a different agenda yourself.

      They follow the letter of the law? So do the multinationals they are campaigning against. With an Irish HQ in Dublin 4 and a CEO who earns €90,000 a year they are, just like the multinationals whose practices they are against, involved in profit maximisation.

      Their donate money to communities abroad? The multinationals with operations in this country provide employment and contribute toward the Irish economy.

      They pay commercial rates and property tax where applicable? So do multinationals. However Oxfam don’t pay VAT on the majority of what they sell in their stores. They also don’t pay their many volunteer employees, and in not doing so are also not paying the associated taxes (Employers PSRI, etc).

      As having a reduced tax burden is a draw to Ireland for many multinationals, which itself is of great benefit to our domestic economy, we are all beneficiaries – including Oxfam.

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