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Ireland beats the rap on tax fraud

We would sell out to anyone, claims defence!

22 July 2020

The announcement that the European Court had rejected a Commission fine of over €13 billion for a tax scheme with the Apple corporation was greeted with jubilation in Ireland.

The nervous hilarity was reminiscent of a bad melodrama where the Mafia clan escape a guilty verdict through the brilliance of their genius lawyer. The flaw in the European Commission's case was that it was based on selective advantage. It failed to show that two rulings given by the Irish Revenue, in 1991 and 2007, afforded Apple a selective advantage.

Yet the facts of the case are damning. The 2007 ruling did allow the company to apply a tax rate that fell to as low as 0.005% in 2014 on profits from countries as far flung as India and Australia. The money was held in an Apple offshoot that had no address, no offices and no employees. However, there was nothing to stop other companies asking for the same deal and this legal loophole made it legitimate.

There was no dissent. Even PbP TD Richard Boyd-Barrett complained that the money hadn't been spent on the working class. The fact that the money had been stolen from workers across the globe and that it exposed the dominance of transnational companies in the Irish economy and politics did not appear to register. Such is the level of demoralisation that a recent 'left wing' manifesto contained the timid plea that the transnationals at least pay the low legal rate of 12.5% corporation tax.

The argument that light touch regulation and a tax haven in Ireland guarantees a flow of inward investment is widely supported. A poll following the initial commission fine showed majority support for the Irish government's defence of Apple.

Yet the credit crunch and Irish bankruptcy arose directly from a policy of subservience to imperialism, Ireland issued an absolute guarantee to banks and bondholders that Irish workers were forced to meet. Tax schemes such as the "Double Dutch" made Ireland notorious and their continued utilisation results in an Irish economy that is so lopsided that instead of measuring GDP a new measure, modified GNI, has to be used instead.

Yet Irish capital holds fast. It has no strategy that would provide housing and health for all. Vulture funds and a constant inflow of private investment keep the show on the road, providing wealth for the ruling class while workers groan under the costs generated by this regime. The system is designed to accommodate imperialist capital with marginal benefits falling to the local bourgeoisie. The International Financial Services Centre (IFSC) has one office listing hundreds of firms qualifying for tax relief but the first 25 "International" firms to enter this “special” tax zone were Irish.

For how much longer can this one trick pony continue its canter? Over time the amount of investment connected to actual production has fallen in favour of completely unproductive financial speculation. The onrushing recession will sharply decrease the volume of trade and Brexit will leave Ireland with partition again an issue as both North and South are ground between a divided Europe and the US/UK axis. In addition, the new government has promised to resolve the housing and health crises and to turn around a reputation of avoiding climate change action by achieving a 7% CO2 reduction.

As with other economies the immediate solution is to borrow money at low interest rates, but as has already been signalled the workers, after suffering a decade of austerity, will be served with the bill. Irish history is dominated by the struggle against British imperialism. The political and economic solutions were seen as lying with a unitary capitalist state. Yet both politically and economically these projects have failed, leaving a policy of advertising a tax haven while ruling out any idea that partition would end and that an Irish democracy would be achieved.

The coming recession will see intense class war. The next chapter of the Irish struggle will involve a renewed battle against imperialism where the historic tasks of national liberation falls to the working class. The goal will be a workers republic with the Irish working class taking their place in a global movement of revolution and solidarity

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