Maureen O'Sullivan (Dublin Central, Independent) | Oireachtas source

During his Budget Statement last Tuesday, the Minister for Finance, Deputy Donohoe, spoke about "building a global and a robust tax architecture that works for all into the future ... [and] "a stable international tax framework". I am referring to those words in the light of the OECD-led work programme to develop a consensus-based solution.

The issue I raise is the need for comprehensive tax reform that would stop corporate tax dodging and limit tax competition. It is important that Ireland represents a strong voice that is committed at the OECD and at home to addressing the challenges of taxing multinationals in the digital area, to putting a stop to corporate tax dodging, to ending the race to the bottom in corporate tax and incentives and, especially, to generating additional revenues where the economic activity takes place. It is particularly important for Ireland to be that voice because of our commitment to the least developed countries.

The current system does not benefit developing counties, some of which are our partner countries. They need the income from corporate tax to provide badly-needed services in health, education and agriculture as well as to mitigate the effects of climate change. If the corporate tax system is not fair to them - we know it is not - then we are depriving those countries of the ability and capacity to raise revenue through income tax and other taxes. This is totally at odds with our policies as conveyed in A Better World.

Multiple loopholes in the international tax system allow for artificial profit-shifting to tax aggressive jurisdictions. Profits generated from sales and other digital activities in one territory can be largely untaxed. The loopholes mean there is little profit to the countries where the production of goods takes place. They allow countries to offer lower and lower corporate taxes to be attractive to investors. One example is tax holidays because of pressure from foreign nationals. Another example relates to the pharmaceutical industry. In seven developing countries, four of the big US pharmaceutical companies avoid an estimated €96 million every year. Some of them pay little tax on profits in Ireland even though they make significant profits here. Multinational corporations are paying less tax than they did before the crash in 2008. They continue to shift as much as 40% of their foreign profits to tax havens. The International Monetary Fund, IMF, put a figure of $456 billion on the losses to governments because of corporate tax shifting.

The least developed countries are especially under-represented on the inclusive framing steering group. As we are committed to A Better World and as we have a strong reputation for humanitarian work, will we also commit to supporting a minimum effective tax rate in every country? That would mean an end to tax havens and it would benefit the world.

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