Oxfam Ireland: When companies do not pull their weight in tax, other people have to foot bill

This decision follows the investigations on illegal state aid between the Dutch government and Starbucks, the Luxembourg government and Fiat, and the Belgian government for its ‘excess profit’ tax scheme.

Ireland has benefitted from multinational investment but all companies should operate under rules which are fair and which do not benefit some companies over others. Deals that exempt companies from paying their legitimate share of tax mean the ordinary taxpayers have to foot the bill.

Poverty in Europe has been rising and some EU countries have even had bailout programmes in recent years, so it makes no sense for European governments to spurn the chance to raise billions in corporate tax income for the benefit of their citizens.

If people’s trust in the tax system is to be restored, the Irish Government and other EU member states must act immediately to end these special deals otherwise people’s trust in the tax system will continue to evaporate.

The EU must also do more to clean up these murky corporate tax practices once and for all, and reassure citizens that sweetheart tax deals with either companies or individuals are a thing of the past. They cannot be tolerated, especially when public services are in vital need of investment.

So far, the multinationals that have been exposed by the European Commission have only had to pay back their missing taxes – no additional fines have been levied. This status quo is not a sufficient deterrent whatsoever.

A proposal earlier this year by the European Commission obliging companies to publicly disclose more information about their tax arrangements is also too weak – it will only apply to the biggest of companies and the information they need to provide is too limited.

Adequate measures to prevent such deals in the future must include public disclosure of where multinational companies generate profits and where they pay their taxes, giving governments and citizens the power to hold them to account.

In addition, the establishment of a public centralised register of beneficial ownership would allow citizens here and in developing countries know who is really behind companies and trusts. Without the financial secrecy which has wreaked such havoc to the global economy, tax evasion and avoidance would be much more difficult.

• Jim Clarken is Chief Executive at Oxfam Ireland