Monday 24 October 2016

Apple tax ruling 'dented consumer confidence'

Charlie Weston Personal Finance Editor

Published 03/10/2016 | 12:28

Taoiseach Enda Kenny and Apple's CEO Tim Cook visit Apple's campus in Cork, in 2014
Taoiseach Enda Kenny and Apple's CEO Tim Cook visit Apple's campus in Cork, in 2014

THE ruling against Ireland from the European Union on the taxes paid here by technology giant Apple are being blamed for a drop in consumer confidence.

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The findings over the corporate giant’s taxes are causing uncertainty and unease for the average consumer in this country, according to the latest consumer confidence survey.

EU competition commission officials claim Apple underpaid its taxes by €13bn.

The looming Budget and limited income gains expected may also be affecting confidence, according to KBC Bank and the Economic and Social Research Institute, the bodies behind the survey.

The KBC Bank Ireland/ESRI consumer sentiment index edged lower to 102.0 in September from 102.7.

The small scale of the monthly decline implies no statistically significant change from the August reading, KBC said.

The index is effectively unchanged from the September 2015 reading.

The announcement of the European Commission ruling on Apple and the Government’s decision to appeal this ruling likely affected responses to the sentiment survey, KBC Bank’s Austin Hughes said.

There are fears among some consumers that the ruling could lead to multinationals leaving this country.

Mr Hughes said: “At the extremes, these ranged from suggesting the Government would have a ready call on funds that would resolve a host of social and economic problems, to warnings about the looming collapse of the Irish multinational sector.”

He said the amounts involved in the EU Commission’s ruling, at €13bn, were huge in terms of the Irish economy.

The figure was the equivalent of around 30pc of tax revenues, he said.

The economist said consumers would be aware of the ruling as a major development and were worried about the implications for the economy.

The assessment of household finances over the year improved modestly from a weak August reading, KBC and the ESRI said.

About half of Irish consumers feel their personal financial situations haven’t changed in the past year.

Of the remainder, roughly equal proportions report gains and losses in their household finances.

This means there is little sense in these numbers that Irish consumers sense any broadly based improvement in their own circumstances.

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