SINN FÉIN MEP Matt Carthy was recently appointed to the European Parliament’s Committee of Inquiry into the revelations made in the Panama Papers leak of documents from law firm Mossack Fonseca. The Committee of Inquiry’s first working meeting is due to take place at the end of September.
MEPs will investigate money laundering, tax avoidance and tax evasion, and report within a year.
The issue of tax justice and the systematic abuse of tax law by the wealthiest individuals and corporations in the world has been a point of debate in Ireland since the European Commission’s ruling on Apple.
But corporate corruption and tax avoidance are not just an issue for Ireland.
The scale of the corruption revealed in the Panama Papers leak, published in April, shocked even hardened observers of tax-dodging and money-laundering.
The leak of more than 11.5 million documents by whistleblower ‘John Doe’ stretching back to the 1970s implicates at least 12 current or former world leaders and 143 politicians or public officials in (legal) tax avoidance schemes. British Prime Minister David Cameron profited from shares in an off-shore company set up by his father, for example.
An immediate wave of protest in Iceland following the leak forced the prime minister to step down over revelations he and his family had hidden millions off-shore.
Altogether there are 214,000 off-shore shell companies represented by Mossack Fonseca named in the papers, active in 21 jurisdictions, linked to people in more than 200 countries.
It’s clear that the scale of money laundering, tax avoidance – which is not illegal – and tax evasion revealed by this leak is enormous and truly global.
This affects us all
But let’s not forget – Mossack Fonseca is just one law firm, based in just one tax haven.
The Panama Papers barely scratch the surface. The actual level of off-shore tax-dodging by the wealthiest in the world is taking place on a scale that is difficult to even comprehend – although it should be noted that the International Consortium of Journalists said on the release of the Panama Papers that merely because people have been named in them does not mean that they have committed a tax crime.
It’s been estimated that every single year US$150 billion (the equivalent of €133 billion) of tax disappears offshore, and that an astonishing $18.5 trillion (€16.5 trillion) in assets is being kept in tax havens.
This affects us all. Every euro hidden by tax avoiders in an off-shore account is one that should have been used to fund healthcare, water, education and other vital public services.
Earlier this year Oxfam published a report revealing that the richest 62 people in the world now own more wealth than the poorest 50 per cent combined – and that this figure has dropped from 388 people since 2010, demonstrating the extreme and rising concentration of wealth since the financial crisis began.
The off-shore scam is a major and direct contributing factor to this obscene inequality.
More than half of the 214,000 named shell companies represented by Mossack Fonseca are registered in British jurisdictions, tax havens such as the British Virgin Islands.
British Chancellor George Osborne will undoubtedly be called before the Committee of Inquiry to be questioned on the stance of the British government in facilitating tax-dodging in the overseas jurisdictions it rules.
Ireland and tax avoidance
There are also more than 300 firms or individuals from the Irish state who have been named in the Panama Papers – companies, businesspeople, property developers and other individuals.
It’s no surprise that there are Irish links to the Panama Papers. In a reply to questions by Pearse Doherty about its response to the Panama revelations, Revenue stated it has requested access to any relevant documents and will make full use of information it receives.
But tackling tax avoidance has never been a priority for the Irish government as we have seen by the fact that this state’s tax deals with major multinationals have now been subject to investigations by both the US Senate and the European Commission.
The government’s decision to appeal the negative finding by the Commission against Apple’s tax arrangements in Ireland means that our country will continue to be mentioned in every conversation relating to tax avoidance across the world.
That our government would effectively state that we are willing to forego €13 billion plus interest clearly demonstrates their lack of credibility and commitment on these.
It’s time to have a serious discussion in Irish society about what part we want to play in the fight against tax avoidance. I want to see Ireland playing a proactive leadership role within an international framework under the auspices of the United Nations in order to develop a progressive and effective global anti-avoidance approach to tax.
Shining a light on off-shore secrets
Sinn Féin absolutely defends the right of national governments to set our own tax rates and operate our own revenue systems. But we will not stand over a taxation regime that is a source of embarrassment to our people, which has created a culture whereby the wealthiest individuals and corporations consider it their right to avoid paying their fair share of tax while ordinary families struggle with additional taxes and charges and while public services are put under huge pressure due to under-funding.
The European Parliament’s Committee of Inquiry will examine the extent of money-laundering, tax evasion and tax avoidance revealed in the Panama Papers, examine the contravention and maladministration of existing laws aimed at combating this behaviour, and make recommendations on identifying and closing the loopholes that allow this behaviour to flourish.
We will begin our work at the end of this month and it is expected that we will report within a year. It is a task I take very seriously. I hope that our work can shine a light on the off-shore secrets that deny billions of euro in revenue to states that should be spent on fighting poverty and homelessness, and building high-quality public services for all.
Matt Carthy is an MEP for the Midlands-North West constituency
To embed this post, copy the code below on your site
have your say