The Irish government is mustering support for digital media companies to face down an EU proposal for a turnover tax.
In response to public pressure that has grown after the revelation of the Panama Papers and the Luxembourg leaks, the EU wants to introduce a 3 percent turnover tax on advertising and sales of user data.
The proposed new EU tax would hit companies with an annual global turnover of more than €750 million and total taxable revenues of €50 million generated in the EU. Officials estimated that over 100 companies would be hit, which they estimate will generate around €5billion annually.
But the Irish government is operating as an agent for companies like Facebook and Google and is lobbying to oppose the move. They have even threatened a veto.
They never threatened a veto when there was talk of the EU insisting on water charges or when the Irish people were pressurised into paying for a bank bail- out. They only appear to get militant when the interests of big corporations are at stake.
The excuse that the Irish government is using is that the EU should wait until there is global agreement created by the OECD.
But this is a spurious argument. The OECD itself calculates that national governments lose somewhere between €100 billion and €240 billion each year because of tax dodging by multi-nationals. That amounts to a staggering figure of somewhere between 4 percent and 10 percent of their revenues.
The proposed new turnover tax would raise a very small amount but is a step in the right direction.
Instead of opposing it the Irish government should be arguing that it be distributed to national governments and used to improve public services
