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Policy issues concerning Taxation

The European Commission has proposed an action plan to tackle the issues of corporate tax evasion and fraud in the EU. Such evasion and fraud by major companies are believed to cost European governments up to €1trillion a year.

The action plan sets out 30 new measures to close loopholes and increase information exchange. The European Commission has also called on EU-member countries to implement the current EU code of conduct on business taxation as soon as possible.

Background

The average tax and social security/insrance burden on employment incomes increased in 26 out of 34 OECD countries in 2011 according to the new OECD Taxing Wages publication.

Proposals in the 2012 Finance Bill to provide tax incentives aimed at luring senior multinational executives to Ireland mark a return to the worst practices of manipulating the tax system to benefit the better off while increasing costs and cutting services for the country’s poorest

Social Justice Ireland strongly welcomes the progress made towards introducing a Financial Transaction Tax in the EU.  This would be a very efficient mechanism to ensure banks and financial institutions made a contribution towards resolving the current series of crises which were, in great part, caused by these very institutions.  It is time financial institutions paid their fair share. 

Some multinational corporations are diverting profits made in developing countries to Ireland to avail of the low corporation tax rate here. By so doing they are robbing the countries in which they made their money of billions of euros in tax revenue.

The German finance minister, Wolfgang Schäuble, has included a tax on financial transactions as part of his budget plan covering the period 2012-2015. This is a very welcome development. Social Justice Ireland has constantly argued for the introduction of a tax on financial transactions along the lines of the proposal originally presented by Nobel Economics Prize winner James Tobin and known since then as the Tobin Tax.

Social Justice Ireland welcomes the decision of the European Parliament to urge the EU to promote the introduction of a financial transaction tax such as the Tobin Tax which could raise around €200 billion per year in the EU and would also discourage speculative trading by making it more costly. A tax along these lines has been proposed constantly by Social Justice Ireland.

Social Justice Ireland has claimed that Government’s proposals to adjust Ireland’s budget in the next four years is unjust and unfair. Government is proposing to achieve adjustments of €15bn by 2014 through taking €10bn in cuts and only €5bn in tax increases.  Ireland’s total tax-take is one of the lowest in the European Union. It is possible to raise Ireland’s total tax-take by €10bn and still remain a low-tax country.

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