Stand your ground, Ireland, over Apple criticism
First it was the multinationals who were ‘named and shamed’ by politicians over their (perfectly legal) tax affairs – and now they’re turning their misguided criticisms and political rhetoric on specific jurisdictions.
But Ireland, which is at the centre of this current furore, is having none of it. And I say well done, to the Emerald Isle! Well done indeed for having the backbone to dismiss the disingenuous attacks you’re facing about Apple’s taxation.
Dublin has robustly rejected claims in a US Senate committee report that Ireland is a tax haven that has enabled the US technology giant to avoid paying billions of dollars in taxes across the globe.
Speaking on Irish radio this morning the country’s deputy Prime Minister, Eamon Gilmore, commented that “Ireland was a highly tax compliant country” and that loopholes in other nations were to blame for multinationals’ use of tax mitigation strategies.
“They are not issues that arise from the Irish taxation system. They are issues that arise from the taxation system in the other jurisdictions and that is an issue that has to be addressed in those jurisdictions.”
Quite right too, Mr Gilmore.
How Apple, and other multinationals, are managing their taxation liabilities is absolutely within the law – otherwise they wouldn’t be doing it.
And as an independent nation, Ireland – like the US, and the UK for that matter – is perfectly entitled to set its own tax policy and must not be bullied by other governments because major companies are, not unreasonably, attracted by its lower taxation.
Rather than attacking high profile firms, and now even more bizarrely certain countries too, politicians on both sides of the Atlantic need to consider whether if they lowered their own taxes and became more competitive, more multinational firms would stay and pay tax.
As such, I’d highly recommend that policy-makers in the US study, as those in Ireland seemingly have, the Laffer Curve, a graph used in economics to show that increasing tax rates beyond a certain point will be counter-productive for raising further tax revenue.