Paradise Papers: EU needs to clean up its act
The release of the Paradise Papers does an enormous public good.
It shines a light on the parts of the financial system that would otherwise remain obscured.
Previously people who used these structures relied on the assumption that their involvement in using offshore vehicles would remain private. That’s no longer the case.
For individuals like Bono, who used a company in low-tax Malta to invest in a Lithuanian shopping centre, the disclosure undermines his endeavours to fight AIDS in Africa.
Some might argue the perceived damage to his reputation may outweigh any benefit from using a Maltese structure.
There is nothing illegal about using these legitimate arrangements.
Just because an individual used these companies does not necessarily mean that they will have avoided tax.
However, the main purpose of using offshore accounts is to manage liabilities to tax authorities around the world.
Advocates for tax equality argue Ireland has many of the features of a haven.
While the main rate of corporation tax is 12.5%, the previous use of Irish arrangements by Google and Apple to pay minuscule amounts does enormous reputational damage.
Major accountancy companies also have a role in designing systems for clients to pay less.
The next time you hear the head of a large practice lecturing politicians on the public finances, remember their role in efforts to reduce the amount of money available for schools, hospitals, or homelessness.
Clearly the banks have a case to answer too.
Bank of Ireland and AIB have halted their involvement in the Isle of Man, but the latter’s resistance to hand over documents to the Revenue Commissioners following a €21 billion State bailout is difficult to swallow.
Despite lip service paid by EU leaders to cracking down on tax havens, it is important to note many of the locations used to reduce bills are in the heart of Europe.
The Channel Islands, Luxembourg, the Netherlands, San Marino, Malta, and Lichtenstein have been frequently part of complicated mechanisms to cut liabilities.
When Minister for Finance Paschal Donohoe and his EU counterparts extol the advances made to stamp out avoidance, remember Europe has a long way to go before it can attack tax havens elsewhere.
Comment via Twitter: @davidmurphyRTE