IMF Expose An Economy Built On A Foundation Of Tax-Dodging Sand

Éirígí For a New Republic condemns the growing use of phantom Foreign Direct Investment companies which are used to channel profits through low tax jurisdictions.  A recent report by the International Monetary Fund and the University of Copenhagen provides an insight into the damage that is being done to the public finances of many countries by phantom FDI. 

Speaking in relation to the scandal of phantom FDI, Éirígí spokesperson Damien Farrell said,

“The recent IMF report found that about €14,000,000,000,000 (€14tr) is ‘invested’ in phantom FDI around the world, with an estimated 85% of this figure passing through just ten states. The Twenty-Six Counties is listed among this dubious top ten, alongside other tax havens like Luxembourg, Holland, Bermuda, Mauritius and the Virgin Islands. Almost two-thirds of FDI that passes through the Twenty-Six Counties is deemed to be bogus by the report.

The Irish Financial Services Centre was set up in 1987 and has been maintained by successive Fine Gael, Fianna Fail, Labour and Green Party governments since then. It is at the heart of a wider taxation regime that allows international corporations, hedge funds, insurance companies and other entities to avoid paying tax in other countries by accessing criminally low taxation rates here in Ireland.

By turning this state into a tax haven these Irish political parties have starved other countries of legitimate taxes and done direct damages to their healthcare, education, housing, pensions and other vital public services. They have also made a significant and shameful contribution to a global race to the bottom which has seen the average global corporation tax rate drop from 40% to just 25% in a short number of years.

The Twenty-Six County economic model is built on a foundation of tax-dodging sand, which will come crashing down at some point in the future. This unsustainable economic model needs to be replaced by one that is based on Ireland’s indigenous strengths, genuine economic activity and a taxation system that ensures the every individual and company pays a fair amount of tax.”