Paschal: End aggressive tax dodging

FINANCE Minister Paschal Donohoe has warned Irish tax advisers against aggressively avoiding tax on behalf of their clients.

In a speech to the Irish Taxation Institute last week, Mr Donohoe strongly defended Ireland’s low 12,5% corporate tax regime, but warned tax advisers that the price of tax certainty was legitimacy.

Referring to moves to repatriate US taxes, he said a tax system that meets international standards, while recognising this significant change in global tax collection, would be better protected from external pressure for change.

He said: ‘Tax advisers and the professional services industry must also play a part.

‘It is in your long-term interests that it comes from within the industry, that you make long-term decisions with your clients, conscious of my objectives and the standards we must maintain. The price of certainty is legitimacy. I offer stability to a system I stand over. This is a game-changer.’

Mr Donohoe added that he sees Ireland’s future ‘as a country that competes from a position of legitimacy’. He said: ‘I intend to make durable policy choices that we can sustain and stand over for the longer term.

‘I want a competitive and stable tax system that is above reproach.’

The speech, which was reported in yesterday’s Sunday Business Post, was regarded as a signal that the country will continue its corporate tax rate, while advising industry to weed out aggressive tax avoidance tactics. Finance expert Brendan Burgess, however, said companies don’t pay enough tax. ‘I actually think that Ireland should play its part as a citizen of the world and make sure that all companies pay tax at 20% somewhere,’ he said.

Ireland’s low corporation tax rate has helped attract foreign direct investment into the country, which has been a major plank of successive governments’ economic strategy and in the creation of new jobs.

Mr Burgess, founder of the consumer website askaboutmoney.com, added: ‘Ireland should not be a part of the competition for low tax.

‘So we should increase our tax rates to 20% and we should not facilitate by any manner or means companies paying a low level of tax. I think it’s an absolute disgrace that we compete for business on the basis of lower tax and rob the tax take from other countries.’

He continued: ‘The likes of Apple and those companies are paying huge taxes in Ireland at 12.5% on profits they supposedly generate here, but we’re not buying that amount of stuff from them.’

‘I want system above reproach’