Labour proposals will move beyond lip service to tax justice – Burton
While the Government motion to be debated in the Dáil this week has yet to be circulated to opposition parties, based on sections of that motion that have been circulated to the media over the weekend, the Labour Party is today making clear that amendments to the Government motion will be tabled to demand more be done to close down remaining loopholes in tax law; to call for the introduction of minimum effective tax rates for all companies in the forthcoming Budget; and to call for the establishment of a standing commission on taxation, according to Labour’s Finance Spokesperson, Joan Burton.
“First and foremost, the Dáil is being recalled to debate a 150 page ruling that only members of the Government have had the opportunity to read. In advance of this debate, it is essential that all opposition parties are given access to this ruling, on a confidential basis if necessary – otherwise the entire debate will be a sham exercise.
“Based on what has been circulated in the media over the weekend, it seems that the motion which will be proposed by the Government will pay lip service to the idea of tax justice, but do no more than that.
“The Labour Party will insist upon three amendments to this motion:
“Firstly, we will insist that the remaining loopholes that are exploited to minimise tax rates in Ireland are abolished immediately. Virtually every commercial law firm in Dublin has a website advertising the loopholes in section 110 of our 1997 Taxes Act. These loopholes are used by the vulture funds that now own our distressed loans, leases and mortgages. Using this section, companies can be structured so that, perfectly legally, the profits leave the company – and the country – long before any tax is payable. As my colleague Brendan Howlin pointed out over the weekend, some of these vulture funds are even using registered charitable status to help them offshore their profits!
“Secondly, we will propose that the forthcoming Budget should include measures to underpin minimum effective tax rates for all profitable companies in Ireland. We have asked the Department of Finance to provide estimates of the gains that will be made by the exchequer in the event of the introduction of such minimum effective rates, and will publish detailed proposals in advance of the Budget. At this stage, the Dáil must make clear that we support such a development in principle, to reinforce public confidence that the idea of tax justice is one that will be realised over the coming months.
“Thirdly, we are calling for an independent standing commission on taxation, to review trends in our tax laws against agreed principles of tax justice, and to identify anomalies as they arise. A one-off review, as proposed by the Government, may come up with short-term solutions. But it will never be able to keep ahead of the corporate law firms and accountancy advisors, who will always seek to exploit new loopholes in our tax code. Only a standing commission can ensure that the state keeps up with all such developments, and will keep the Irish tax code focussed against overly aggressive tax planning and avoidance.
“Good work has been done over recent years in this area, including the ending of the double-Irish and Ireland’s participation in the OECD review of this area. This work has played a part in seeing a significant increase in corporation tax receipts, which rose from €4.6bn in 2014 to almost €6.9bn in 2015. And the Labour Party has clearly acknowledged the need for an appeal on the ruling of the commission to go ahead, so that we can get clarity on who sets Ireland’s corporate tax regime. But that’s no excuse for the Government to refuse to embrace further reforms that would make sure everyone pays their fair share.”