Kenny must bring unity to Cabinet - Apple tax bill

AS a deeply divided Cabinet meets in a crunch session today, perhaps the most positive argument that embattled Taoiseach Enda Kenny can bring to the table is the commitment to Ireland and jobs reinforced by Apple boss Tim Cook.

Cabinet unity is absolutely vital as the minority government and the richest company in the world combine forces to appeal in the European courts against an EU claim that Apple owes Ireland €13bn in unpaid taxes resulting from an illegal sweetheart deal.

Inevitably, Mandy Rice Davies’ famous quip — ‘He would say that, wouldn’t he?’ — comes to mind about much of what Mr Cook had to say in the blazing row over the European Commission demand that Apple pay up. On the other hand, the advice from Ryanair boss Michael O’Leary, who has often locked horns with Brussels, is that as an autonomous tax authority, Ireland “should politely tell them to bugger off”.

Be that as it may, the fact is that is that Apple has been in this country for 37 years and like any other multinational, avails of tax loopholes. The thorny question facing the Government in this case concerns the legality or otherwise of any favourable tax deal done with Apple, such as the ‘Double Irish’. That strategy to lower corporate liability brought Ireland an unwelcome reputation as a tax haven. Though scrapped last year, further reputational damage is currently being done by the enormous potential windfall of €13bn, which many people think the Government should spend on health, education or to reduce the national debt.

Another question yet to be answered is whether such deals were done with other companies?

Interestingly, Mr Cook has also revealed that Apple has already put money aside for repatriation to the American treasury. The fact that €200bn is lying dormant in its bank vaults shows the wealth of this powerful conglomerate.

Against a backdrop of confusion and uncertainty, if Mr Kenny is to avert the collapse of his tottering administration, he will have to bring truculent Independents and macho members of his own party in Cabinet into line. Otherwise, between them, they could bring down the Government, if not today then at some point over an avoidable split generated by publicity-seeking sound bytes. In the current crisis, the Taoiseach will not find a better stick with which to beat them into line than the unspoken but potential threat posed to 5,000 Apple jobs in Cork, with 1,000 more in the pipeline, as no doubt the Apple boss reminded Mr Kenny during their weekend telephone conversation.

Meanwhile, in order to avoid the instability caused by members of this government constantly bitching at one another as it lurches from issue to issue, political egos must be left outside the Cabinet room. Besides underlining the urgency for greater clarity and transparency in relation to Ireland’s badly tainted tax regime, the Apple crisis has also demonstrated the need for proper governance by an administration at risk of falling. It is Mr Kenny’s job to ensure that a proper system of governance, one that actually works, is put in place sooner rather than later.

More on this topic

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Government backs Apple: Appeal is not in long-term best interestGovernment backs Apple: Appeal is not in long-term best interest

'No doubt' many countries would claim part of Apple's €14bn in back taxes, says Donohoe     'No doubt' many countries would claim part of Apple's €14bn in back taxes, says Donohoe

Apple's Irish state aid tax bill paid in full to GovernmentApple's Irish state aid tax bill paid in full to Government


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