Dr. Sheila Killian:

I thank the Cathaoirleach and Deputy Boyd Barrett. I fully agree with what Mr. Clarken has laid out. I emphasise that there is a great opportunity for Ireland to do something now in the area of secrecy. Unlike many other countries, Ireland is not categorised as a secrecy jurisdiction. Tax and wealth secrecy have three main problems, namely, moral hazard, risk and trust, with the latter being the most important of the three. The big piece of research on trust is the Edelman Trust Barometer, which is published every year. It shows that Ireland still has a good deal of trust in social cohesion. Most people are a little concerned about cracks appearing in social cohesion. We have seen that with the small but growing populist movement, which is obviously of concern to members of the committee, as politicians and leaders. That is not the kind of society in which we want to live. It creates risks for politicians when people lose faith in the institutions and the Government. Ireland has not yet reached the level of polarisation and lack of trust that the UK or the Netherlands, for example, have reached.

In order for people to have that kind of trust, they need to believe the taxes they pay are reasonably equitable and to have a sense of what other taxes are being paid, who else is being taxed and who has wealth within the country. It is important to document that in order to avoid a narrative, which is beginning to grow, that it does not matter what the small people do and the wealthy are doing what they like in Ireland. There is a need to counter that narrative and the only way to do so is with an evidence base. That involves using some form of wealth tax or wealth register as a reporting initiative so that people know what wealth is in the country, who owns it and approximately what tax they are paying. That also brings in the risk management aspect because it allows the Government and the Department of Finance to manage risk within the economy. For example, we saw the fallout in London when it became apparent how much wealth was being held by Russian oligarchs. It is important for the Government to know who owns what in the country and it is important for citizens to know who owns what so that we can continue to have that trust and social solidarity. It also creates more accountability, which creates more trust in the organs of the State, as well as in politicians, so that they are free from accusations of being lobbied unduly by the wrong people.

Recent research, some of which I was involved in, shows that when there is a lot of secrecy, particularly tax secrecy, that creates a significant moral hazard for everyone involved in financial services. A recent EU-funded study we carried out showed that when tax professionals operate in conditions of tax secrecy, they are much more inclined to fall back on what their organisation states is right or wrong rather than on what their profession states is right or wrong. That kind of moral hazard is a problem for those countries.

Separate entirely from the amount of revenue a wealth tax might raise, having a conversation about it and having some form of wealth register and asset register delivers a significant amount of non-financial benefits to society and managing the economy. In a way, an effective wealth tax might not raise that much money, in the same way as a plastic bag tax, if successful, does not raise a lot of money because people divert from using plastic bags. The amount it will raise is the bonus but the core thing is countering growing populism, maintaining the level of trust and social solidarity in the country and managing risk within the economy.