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Time for Irish Government to back tax transparency reforms

6 November 2017 
 
Ireland needs to get on board with proposed EU reforms which would tackle the type of scandalous activity revealed in the Paradise Papers, Oxfam Ireland has said today. 
 
Information released in the papers has shed new light on the role played by Irish banks that allowed some of the world’s most profitable corporations significantly reduce their tax bills. Further details of Ireland’s involvement are also scheduled to be released. 
Oxfam Ireland, CEO Jim Clarken said; “I wish I could say that I was surprised by the detail contained in the Paradise Papers and Ireland’s suggested involvement.  However, we’ve been here before with the Panama Papers and other leaks. Nevertheless, we can’t just shrug our shoulders and accept this as a part of international commerce.
 
Tangible options are now available to put a stop to this murky world where corporations and the super-rich cheat governments out of billions in revenue. 
 
Ireland now has the opportunity to show leadership by supporting EU proposals aimed at fighting this type of tax evasion. This is especially important considering that our own country’s tax arrangements have been implicated as facilitating some of these nefarious practices. So now is the opportune time for the Irish Government to show their support for these reforms.” 
 
Specifically, the Irish Government now needs to support:
 
Public Country by country reporting: This requires large multinational companies to disclose where they generate profits.  This means that companies would have to pay taxes in the country where the profits are made. Currently, they declare profits in offshore havens where in reality, the company has little or no activity and pay miniscule tax. 
 
Establish a “blacklist” of non-tax compliant countries: Compile a list of those nations which refuse to adhere to international tax rules. Listed countries should face stiff penalties. Currently Trinidad and Tobago is the only blacklisted country in the world which is not credible. 
 
Jim Clarken said; “At the core of these reforms is transparency. These is no legitimate reason for big corporations to hide their tax affairs. The only reason multi-national companies use these offshore funds is to allow them avoid paying their fair share of tax. Tax that could be used in Ireland and in poorer nations to help fund health, education and other social services. 
 
The Irish government must show commitment to playing its part in tackling this global scandal by supporting reform measures at EU level. In the past, the Irish Government claims that it fulfils international standards in tax transparency as set out by the OECD. However, under these transparency standards the tax information of multinational companies remains secret.  
 
These so-called ‘transparency measures’ haven’t prevented the abuses we are seeing in the Paradise Papers. It is obvious that public reporting is needed to end these abuses once and for all.
 
Government has said that tax avoidance is a problem best tackled at international level. Now is their opportunity to be part of this global response by dropping its opposition to these vital reforms.” 
 
Oxfam estimates that over $7 trillion of personal wealth is hidden in these offshore accounts. At least $100 billion of tax revenue is lost to developing countries alone every year. Even if half of this money was paid in taxes, the lives of 8 million women, children and babies would be saved. Ireland, the lack of tax revenue leads to essential services being cut or additional taxes imposed on ordinary citizens. 
 
ENDS
 

REPUBLIC OF IRELAND: Daniel English on +353 (0) 86 354 4954 / daniel.english@oxfamireland.org

NORTHERN IRELAND: Phillip Graham on +44 (0) 7841 102535 / phillip.graham@oxfamireland.org

 

Paradise Papers reveal governments still losing billions through tax dodging scams

Political leaders must put interest of public over corporates and super rich-Oxfam Ireland

5 November 2017

Spokesperson available

First came #LuxLeaks, then #Panama Papers. Now, today the so called #Paradise Papers reveal that governments are still losing billions in revenue due to international corporations and billionaires hiding their fortunes and avoiding paying their taxes.

Today as the International Consortium of Investigative Journalists published details of the companies and individuals cheating governments out of billions of dollars in tax revenues, Oxfam Ireland is demanding that political leaders put the interests of the public over corporates and the super-rich and put a stop to the scandal of tax dodging.

Oxfam Ireland, CEO Jim Clarken said: “The Paradise papers are yet another ugly insight into how the global tax system is being exploited by those who should be paying most. They reveal the staggering scale of the tax dodging scams and evasion tricks which are depriving governments of billions in income.

The revelations in the Paradise Papers also expose our leaders’ feeble attempts to stop tax cheats. Following the Panama Papers expose, we heard tough talk from politicians but this has translated into weak reforms thanks to pressure from big business and the super-rich.

We must remember that tax dodging impacts on everyone whether they live in richer nations or the developing world. It fuels poverty and inequality. When the super-rich and corporations dodge taxes it is ordinary people, who pay the price.

Just think how the additional revenue could help improve services in a country like Ireland. The extra taxation could be directed towards schools, hospitals and other social services. Some of the billions dodged by corporations and the super-rich in poor countries every year could fund the healthcare services needed to prevent the deaths of millions of mothers, babies and children.”

Oxfam Ireland is proposing several ways to stop the global tax dodging:

  • Establish a “blacklist” of countries who refuse to adhere to international taxation rules. Listed countries should face stiff penalties.
  • End tax secrecy. Establish a publicly-available, register of companies so we know who their real owners are. This will make it easier to follow the money.
  • Introduce a second round of tax reforms to build on the BEPS1 (Base Erosion and Profit Shifting) process. This time it should work in favour of all countries, not just the wealthiest.

Jim Clarken said: “Governments, including Ireland’s must work together to shut down tax havens by establishing a global tax haven blacklist; end tax secrecy so that its clear if corporations and the super-rich pay their fair share of tax; and kickstart a new round of tax reforms that rebuild the tax system in the interests of the majority and not the few.

It is not good enough to argue that tax avoidance is permissible because practices fall within the letter of the law. Legal loopholes abuse a broken system. Everyone has a responsibility to contribute towards the public services and infrastructure on which we all rely.

These changes take a lot of time and effort, but most importantly, they take political will. Otherwise, the super-rich will keep siphoning billions of dollars away into their offshore accounts.”

To learn more about Oxfam Ireland’s tax justice campaign go to https://www.oxfamireland.org/tax

ENDS

REPUBLIC OF IRELAND: Daniel English on +353 (0) 86 354 4954 / daniel.english@oxfamireland.org

NORTHERN IRELAND: Phillip Graham on +44 (0) 7841 102535 / phillip.graham@oxfamireland.org

As he meets with Apple CEO, Varadkar must push for fairer tax arrangements for multinationals

First meeting since EU referred Ireland to European Court of Justice

As the Taoiseach meets with Apple CEO, Tim Cook today, Oxfam Ireland is urging him to stress that the days of special deals for companies like Apple are over.
 
During his trip, the Taoiseach will meet with senior executives from several tech firms including Apple, Facebook, Microsoft and Google. This will be the first meeting between the Taoiseach and Apple since the European Commission announced it was referring Ireland to the European Court of Justice for failing to collect €13 billion of state aid from the company.
 
Oxfam Ireland, CEO Jim Clarken said; “These meetings are an ideal opportunity for the Taoiseach to make an unambiguous commitment to reforming the tax arrangements for multinationals operating in Ireland.
 
Ireland’s needs to stop blocking EU plans to ensure all multinationals in the EU show greater transparency when detailing where they make their profits and pay their taxes.  As long as tax dodging continues to drain state coffers, there will be less money to spend on important public services.
 
Most Irish people understand that negotiating special tax deals like the one that allowed Apple to avoid paying €13 billion has greatly damaged Ireland’s international standing and reputataion.
 
Greater tax transparency would make it easier to verify whether companies’ tax bills reflect their real economic activity and to hold them to account if not. Fairer tax arrangements are good for Ireland, good for the EU and good for developing countries. The Taoiseach now has the opportunity to show leadership by insisting on arrangements which ensure big corporations pay a fair share of their big profits in taxation.”
 
This week Oxfam realised a video highlighting the impact on poorer countries.  Less than half of the amount of tax which companies dodge in poor countries per year would be enough to pay for essential healthcare to prevent the needless deaths of eight million mothers, babies and children. 
 
ENDS
 
Daniel English
Oxfam Ireland
086 3544954 
 

One jar of paracetamol for 24,000 people - it just doesn't add up

I recently returned from a trip to Malawi, my second visit to the country with Oxfam Ireland. Like citizens everywhere, Malawians have a right to good healthcare. Sadly, this isn’t the case. An unfair tax system means that the nation’s medical facilities are overburdened – and even though Malawi has some of the best health policies in the world, ill-managed public funds means they can’t be put into practice.
 
(Top-Left) Maria Gilasiano with her baby daughter outside Phimbi Health Centre. Photo: Mathias Kafunda. (Top-Right)  Liness Pensulo and her baby daughter. Photo: Mathias Kafunda. (Bottom-Left) Disability Committee member Peter Simoni. Photo: Mathias Kafunda. (Bottom-Right) Clockwise from left: James Afuwa, Medical Assistant for Phimbi Health Centre; Niamh Ní Ruairc of Oxfam Ireland; Bettie Chumbu, DCT Project Officer; Alex Chiphathi , Monitor of Phimbi Radio Listening Club; Asima Stambuli, Ward Councillor for Utale Ward, and Zione Mayaya, DCT Project Coordinator. Photo: Mathias Kafunda 
 
During my trip I visited Phimbi Health Centre in Phimbi, Balaka South. It was originally built to serve a population of 10,000 but now facilitates at least 24,000. When I visited, there was just one container of paracetamol in the drugs cabinet. I was also shown the maternity ward’s four beds – that’s four beds for 200 births every month. And while the staff do their best, they too are struggling due to a lack of resources. A shortage of manpower doesn’t help – the centre should have 60 staff members but poor funding has seen that number cut to 30.
 
Over a small sink in the maternity ward a sign which reads ‘Sambani mmanja pano’ translates as ‘Wash your hands’. But there is no water, no drinkable water, at least. A borehole outside the centre was dug between two septic tanks. As you can imagine, that water isn’t safe to drink. Although the health centre doesn’t use the water, people living in the local community do – leaving them exposed to a whole host of diseases. Those who want clean water have to travel 2km to collect it. That means that women, despite being exhausted and still suffering the pain of childbirth, have to make a 4km-round trip on foot just to clean themselves.
 
Another lifeline pulled from the centre due to a lack of resources is an ambulance. Its vehicle was taken by the district hospital – which too was hit by underfunding – and was never replaced. These days, if the health centre can’t deal with a patient’s condition, the ambulance must be called from the District Hospital of Balaka, a two-and-a-half hour drive away. This has led to women giving birth – sometimes unaided – in the back of an ambulance as they are transferred to hospital.
 
I met one woman who found herself in that situation. Maria Gilasiano gave birth in the back of an ambulance as it made its way to the district hospital. She was being transferred due to complications during labour and ended up delivering her baby herself during the journey. Also in the ambulance at the time was Peter Simoni, a member of the local Disability Committee. Amid the chaos of the birth, Maria and Peter’s bloods got mixed – and while it was not a danger to life, it shows that a lack of resources can pose serious hygiene risks. 
 
Of course, these are risks that Peter knows all too well. There is no wheelchair ramp at the health centre so when he visits, he is forced to crawl on his hands and knees to get into the building – and the toilets, thereby exposing him to potentially dangerous bacteria and germs.
 
Those living in the community also face drugs shortages. Liness Pensulo, another woman I spoke to, couldn’t get malaria tablets for her young son as they weren’t available at the health centre at the time. Instead, she had to travel to a private chemist where she had to pay significantly more. Worse still, she didn’t get proper instructions on how to administer the drugs to her child. The potential consequences of incorrect dosages can be fatal. 
 
Every day, across the world, lives are put at risk due to unfair tax systems. In Malawi, Oxfam Ireland is working with our partner Development Communications Trust (DCT) to help marginalised communities get access to the healthcare they deserve.
 
Niamh Ní Ruairc is Programme Quality Officer with Oxfam Ireland
 

A third of tax dodged in poor countries enough to prevent 8m deaths a year, new Oxfam study reveals

Just a third of the $100bn [approx. €86bn/£78bn] tax that companies dodge in poor countries annually is enough to cover the bill for essential healthcare that could prevent the needless deaths of eight million mothers, babies and children, Oxfam revealed today as it launched a hard-hitting film illustrating the human cost of tax avoidance on the world’s poorest.

Experts estimate that $30bn [approx. €25.8bn/£23bn] is needed each year to pay for basic healthcare such as vaccinations, midwives and diarrhoea treatment that could prevent an average of 7.8m children and 210,000 women dying in 74 countries with large numbers of people living in poverty.

Jim Clarken, Oxfam Ireland’s Chief Executive, said: “Tax dodgers may not be literally stealing medicines from the pockets of the poorest but they are depriving poor countries of billions that could be invested in healthcare.

“Oxfam works in some of the poorest countries in the world and sees the impacts of tax dodging every day. For instance, we work in Tanzania which has an annual health budget of just €17 per person. Every medicine that is not bought for the lack of government funds due to tax dodging affects thousands of men, women and children across the world.

“While corporate tax avoidance strips developing countries of vital funds needed for hospitals, millions of the world’s poorest people are missing out on basic medical treatment that could save their lives and help them escape hardship. There can be no excuse for delaying tough action against tax dodging.

“As the EU tax transparency process is at a standstill, the Irish and UK governments should lead the way in helping to ensure companies pay their fair share of taxes everywhere they do business.

“Ireland should agree legislation with its EU partners to ensure that multinationals publically report on a country by country basis where they make their profits and pay their taxes.

“Making this information public will give both policy makers and the public the opportunity to understand how a country’s corporate tax system is actually operating, and provide them with the information to review and change it.

Oxfam is urging the UK Chancellor Phillip Hammond to use next month’s Budget to commit to implementing tougher tax laws for British multinationals, including those that operate in developing countries, by the end of 2019. As movement towards an EU tax transparency deal has stalled, it is calling on him to push ahead and build on the leadership some UK companies have already shown.

More than a year since the Government passed legislation to enable the introduction of comprehensive public country by country reporting for UK-based companies and nearly two years since the last Conservative government agreed the case had been made for the change, it is still no closer to being a reality.

Poor countries are twice as dependent as rich countries on corporate tax revenue as a proportion of the money they have available to buy medicines, pay nurses and pipe clean water to people’s homes. There is evidence to show that when poor countries increase their tax revenue – in particular from corporate and income tax – they spend more on healthcare, leading to healthier populations.

Greater tax transparency would make it easier to verify whether companies’ tax bills are in line with their real economic activity in every country where they do business – and to hold them to account if not.

However, until these public reporting requirements are mandatory for all large businesses, widespread tax avoidance will continue to deprive governments rich and poor of revenue needed to provide essential services and tackle poverty.

ENDS

For more information or interviews please contact Phillip Graham on 00 44 (0) 7841 102535 / phillip.graham@oxfamireland.org

 View and/or link through to the film here.

 

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