Sinn Fein has come in for criticism by figures from both political left and right after taking a crucial decision to abstain over whether Ireland is a tax haven or not.
The party has been accused of being “out of touch with left-wing thinking” by People Before Profit MLA Gerry Carroll, and of being inconsistent in its position by UUP MEP Jim Nicholson, following its decision not to support the proposal.
The proposal had been put before MEPs in the form of an amendment to a report about tax avoidance by the rich and powerful.
According to ‘The Malta Independent’, the amendment asked MEPs to call upon the European Commission “to regard Luxembourg, the Netherlands, Ireland and Malta as EU tax havens” (the commission being effectively the executive arm of the whole EU).
Multiple media sources state that the vote on this amendment was split along these lines: 327 MEPs in favour; 327 against; and 24 abstentions.
Now it has emerged that Sinn Fein’s own MEPs were among the 24 who abstained, effectively scuppering the proposal.
The report, called “Recommendation following the inquiry on money laundering, tax avoidance and tax evasion”, was eventually approved by MEPs, but minus any clause about Ireland being a tax haven.
The whole episode actually unfolded on December 13 last year, but has now come to wider public attention thanks to a report by ‘The Times’ of London, which identified Sinn Fein’s four MEPs – Martina Anderson, Lynn Boylan, Matt Carthy and Liadh Ni Riada – as being among those who had abstained.
The decision appears to clash with Sinn Fein’s recent rhetoric on the subject.
For example, a press release from MEP Matt Carthy in October referred in its headline to the “Irish state’s tax haven activities”.
And a statement from him in December dismissed as a “whitewash” a list of tax havens which had just been drawn up by EU finance ministers, on the grounds that it automatically excluded any EU member states.
Socialist MLA Gerry Carroll, who surprised the political establishment by seizing a seat from Sinn Fein in its West Belfast heartland in 2016, said: “You really have to scratch your head and wonder why a party that calls itself left wing would abstain on a vote accurately describing the Republic of Ireland as a tax haven.
“You cannot abstain when it comes to making corporations pay their way. You are either on the side of making the corporations pay to fund public services, infrastructure and fair wages for all, or you are on the side that gives them a free ride and a handout.”
He said the fact that Sinn Fein had defied its allies in the European Parliament in not backing the ‘tax haven’ motion “shows how out of touch they are with left wing thinking, not only in Ireland but across Europe”.
Jim Nicholson, longstanding UUP MEP, said meanwhile: “While the Republic’s tax affairs are solely a matter for the Irish Government, it is interesting to see Sinn Fein taking multiple positions on this issue.
“Then again, they were an anti-Europe party right up until the Brexit referendum.”
Meanwhile commentator and cartoonist Brian John Spencer said: “So much for being a party of Connolly, Pearse, the Easter Week of 1916, anti-austerity, the ordinary people, equality, etc. etc. Up the multi-nationals.”
As to why it abstained on the ‘tax haven’ amendment, Sinn Fein told the News Letter in a statement it was “because a comprehensive and independent definition of a ‘tax haven’ must be carried out - this task should not be left to the EU”.
Sinn Fein went on to add that it had ultimately abstained on the whole report itself.
It said this was because “a host of conservative groups removed important provisions at committee stage”, weakening the report (even though the party’s own MEPs had helped removed the hard-hitting “tax haven” amendment themselves).
The party statement added: “Crucially, several aspects also infringed on the sovereignty of EU member states to dictate their own tax policies.
“As Sinn Fein representatives, our MEPs believe tax and fiscal policies should be set by elected representatives on the island of Ireland.”
WHAT IS SPECIAL ABOUT THE IRISH TAX SYSTEM?
The Republic of Ireland has been much-criticised in recent years for its tax rules.
It has long had a corporation tax rate of 12.5%.
By comparison, the UK rate is now 19% (which itself has come down from 30% a decade ago).
As a result, multi-national firms have chosen Ireland as the place to report their revenues.
For example the Financial Times has reported that, thanks to the Irish tax system, Facebook paid a mere £4,327 in corporation tax to the UK Treasury in 2014 - adding that this represented “a smaller bill than paid by one person on the average UK wage”.
In addition, in 2016, EU investigators ruled that the Irish state gave “undue tax benefits of up to €13 billion to Apple”, letting the iPhone maker pay an effective corporate tax rate which had sometimes been as low as 0.005%.
Among the methods used to achieve this was permitting Apple to allocate profits away from Ireland in an essentially non-existent “head office” which, it turned out, “was not based in any country and did not have any employees or own premises”, according to the EU investigation.
Apple disputes the ruling.
The EU then ordered the Irish state to recoup this €13bn – a sum just shy of the annual health budget for the entire country.
However, the Irish government disputed this demand, and is currently arguing that it should not claim the money back.