We are frequently genuinely and understandably concerned with the lack of accountability that exists in much of our political and administrative public bodies.
The annual report of the Office of the Comptroller and Auditor General is testimony to the apparent lack of regard some of those at the top of the public sector and political life have towards taxes paid by hard-pressed taxpayers.
However, the lack of accountability at the heart of the EU puts our little violations into the halfpenny place. Nobody at the top of the EU has a direct democratic mandate of any nature. They were all elected by their peers.
Earlier in the week, I read a short review of the new book by erstwhile Greek Finance Minister, Yanis Varoufakis, who fell foul of the EU during the Greek bailout negotiations and had to leave his position and return to academia. The column carried the headline ‘Varadkar and Donohoe should talk to Yanis Varoufakis’ and was subtitled ‘Ex-Greek Finance Minister lays bare lack of accountability in European machine’.
We know only too well how our so-called European friends reneged on the promises it made to us during the reign of the Troika. We also are conscious that some of the debt now being carried by the Irish taxpayer was a direct result of alleged EU refusal to allow us to ‘burn the bondholders’ — or gamblers who buy and sell bonds to make a profit.
For most of us, taking a punt means sometimes you win and other times you lose. The EU’s version was big boys cannot be seen to lose.
The Common Consolidated Corporate Tax Base (CCCTB) has been with us on and off since 2011. The rationale forwarded when this policy was mooted was to assist industry and commerce in calculating their taxes because of the differing tax regimes in operation in member countries.
The EC suggested that it would reduce the administrative burden, compliance costs and legal uncertainties for cross-border companies and would significantly help to combat tax avoidance in the EU.
In practice, it means that corporation tax would be calculated not on where the product was made but on where it would be sold.
In 2011, in the early part of the fight back from recession, it was clear that the CCCTB was going nowhere. In October 2016, Pierre Moscovici, economic affairs commissioner, decided it was time to have another cut at it. It’s an issue that must be approved by all 27 members, assuming Brexit is still to happen.
Many of these countries have serious issues with it. In whose interests is it being pushed?
Ireland is a small country, with a small population, on the periphery of Europe.
However, Ireland is also one of the most successful countries, not only in Europe but in the world, at attracting foreign direct investment (FDI). There are other countries in the eastern part of the EU in a similar situation.
The CCCTB, as it is currently envisaged, is not in the interest of these smaller countries. It is, however, in the interests of the larger countries such as France, Germany and the other more populous and richer countries at the heart of Europe. When those countries were winning all of the FDI projects all was fine and dandy but now that it’s going elsewhere — because of higher costs or because of stringent labour regulations — they need to find another way to win back new investments.
MEP Brian Hayes this week said the Commission, in its handling of the CCCTB, had fudged its figures in an effort to persuade sceptical countries to come on board.
An Ibec study suggests Irish tax revenues would take a 7.7% hit if the proposal was adopted. We cannot afford to take such a hit. Our government must make certain that any agreement on its part must not impact on our ability to sustain our own economy.
It is unacceptable that the European Commission cannot give an exact picture of how a revised tax base will impact on every country.
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