Consultation process launched on tax system

The Department of Finance is launching a consultation process to examine the way the country’s corporate tax system affects developing countries.

The initiative follows on from the publication of Ireland’s international tax strategy on budget day last October. It is an attempt to make the country’s tax dealings with emerging economies more transparent and fair.

The move has been welcomed by Christian Aid Ireland. Head of advocacy and policy Sorley McCaughey said: “Continued focus on Irish tax policy and the role Ireland plays in facilitating large scale tax avoidance by multinationals makes it imperative that we are seen to be doing all we can to ensure that we are not depriving poor countries — many of which are Irish Aid programme countries — of badly needed revenue.

“Our research has shown that developing countries lose some $160bn each year because of international tax dodging — a figure which is much higher than those countries receive in overseas aid.”

Ireland is already participating in the OECD’s base erosion and profit shifting project, which aims to minimise aggressive tax planning by multinationals that has enabled firms like Apple to cut the corporate tax they pay on international activities to single-digit figures. It is believed a similar initiative could be launched for emerging market economies.

Submissions are invited from civil groups over the next eight weeks and a paper will be released later this year.