IRELAND IS facilitating tax dodging and has adopted "many of the characteristics of a tax haven", a report by development agency Christian Aid claims.
Death and Taxes: The True Toll of Tax Dodgingsays that "the lack of transparency in Ireland's tax system allows international corporations to siphon wealth out of poor countries".
It also maintains that the tax breaks Ireland offers "are inconsistent with the recent stepping up of its development contribution through aid". The agency calls on Ireland and Britain to support the Organisation for Economic Co-operation and Development (OECD) in its efforts to regulate tax havens and that the State should "promote an international accounting standard that compels companies to publish their accounts on a country-by-country basis, so that abuse practices can be spotted quickly".
A spokesman for the Department of Finance said they could not comment directly on the report as it had not been assessed. The spokesman said, however, that "Ireland is in compliance with OECD principles on taxation."
Alex Cobham, one of the report's authors, said, however, that Christian Aid was asking the Irish and British governments to be "more positive" in supporting the OECD in its efforts to improve tax enforcement measures. "Both the UK and Ireland are seen as more of an obstacle in that," he said.
The report states that "the Government of Ireland has in recent years laudably increased its aid budget. Yet at the same time it has adopted many of the characteristics of a tax haven, thus helping to facilitate tax losses in developing countries."
Christian Aid has called on the two governments to take a lead "in reforming this system and in questioning the assumptions on which it is based".
"It's not that Ireland is playing a particularly bad role," said Mr Cobham. "Our concern is that we see a potential incoherence between Ireland's domestic tax policy and its stance on aid." The international tax element is "set up to make it easier for transnational corporations to clear their profits", and hide where they came from.
He said that previously there was some geographic segmenting of profits but that was gone. Corporations "are more or less able to produce one global set of accounts". He said that if profits were listed on a country-by-country basis, and if a country like Zambia accounted for 20 per cent of productivity but only 2 per cent was declared as from Zambia, it would raise questions.
The report says 1,000 children a day die from disease and poverty in poor countries "because of illegal trade-related tax evasion" and they estimate that globally tax evasion costs the developing world at least $160 billion in lost revenue annually.
The figures are based on the estimate by Raymond Baker, a senior fellow at the US Center for International Policy, that 7 per cent of global trade involves the illicit movement of capital between countries by transnational corporations and unrelated business entities.
Margaret Boden, chief executive of Christian Aid Ireland, predicted that "illegal, trade-related tax evasion alone will be responsible for the deaths of some 5.6 million children under the age of five, between 2000 and 2015. That's almost 1,000 a day."
The report blames the secrecy offered by more than 70 tax havens for widespread abuses, and highlights the role of facilitators, including big accountancy firms in promoting their use. "The unpalatable truth is that the lack of transparency in Ireland's tax system means it undermines the tax structures of other countries," said Dr David McNair, the agency's policy and advocacy officer.
