How often have you heard the line, ’the country cannot afford it’? Or plaintive cries about how the wealthy lost everything in the great Celtic Tiger crash.
But evidence is mounting that the Irish elite promote and engage in tax dodging on a massive scale. We use the term tax dodging advisedly because we do not accept the distinction that is made ‘avoidance’ and ‘evasion’. The former category is legal and is supposedly ok while the latter is a definite no,no.
Yet the distinction makes no sense when you consider how law-makers deliberately write legislation to support their wealthy backers.
Take the case of Glanbia and Luxembourg. This Irish multi-national put €1 billion into companies in Luxembourg that have no employees for the sole purpose of avoiding tax. It hired the accountancy firm, PWC, to write up a draft’ advanced tax agreement ‘which was then presented to Monsieur Kohl, an official in the relevant tax office. The same officials processed scores of such agreements each day drawn up by tax planners like PWC and, literally, rubber stamped them. It meant that Glanbia paid virtually no tax in Luxembourg.
It then lent that money back to other companies in the Glanbia group at a designated interest rate. Under Irish law, interest payments – even if they are to your own company – leads to a write down on tax on profits. It is one of the key mechanisms by which the official Irish corporation tax rate of 12.5percnet is knocked down to a much lower figure.
When a tax planner like PWC gets to actually write the regulations, then the distinction between avoidance and evasion is meaningless.
Now let’s switch focus to the Public Accounts Committee of the Dail.
A prominent civil servant, Gerry Ryan, has handed an explosive set of documents to this committee concerning tax dodging by senior Fianna Fail and Fine Gael politicians. Ryan is no ordinary civil servant- he was appointed by Mary Harney to inspect the Ansbacher Account in 1998,.This was a secret account used by the wealthiest people in Ireland to both bribe Charles Haughey and to spirit their money away from the gaze of the Revenue Commissioners.
According to the Ryan dossier, nine senior Fianna Fail politicians and one prominent Fine Gaeler were on a ‘very secret list ’of Ansbacher contributors.
Even more amazing, when the High Court decided to appoint a judge to investigate the Irish business links of Ansbacher, it choose Declan Costello, a former Fine Gael activist who it turned out had an account linked to the Ansbacher scam.
Efforts by Ryan to pursue his investigations were stymied all the way. He was dismissed by Mary Harney before investigations were complete and found that material he sent to the current Minister for Enterprise Trade and Employment, Richard Bruton, was not forwarded to the police for two years.
The involvement of a prominent Irish firm like Gambia in tax dodging and the continued cover-up over Ansbacher tell us one thing about the Irish political elite – they preside over a tax haven and see tax dodging as a game in which they are the best players.
People Before Profit