Ireland is “stealing” tax revenues from other EU countries, a Nobel Prize-winning economist has said.
Joseph E. Stiglitz, a professor at New York’s Columbia University, repeated past accusations against the government, calling Ireland a ‘bad neighbour’.
“Much of the tax revenue that Ireland gets is a result of stealing tax revenue from its neighbours - from other members of the EU,” Mr Stiglitz told a webinar on Thursday.
He said there were “flaws” in Ireland’s “negative” tax regime.
“They take away a lot of revenue from the other countries, and they get a little revenue for themselves. It is not the kind of thing which good neighbours do to their neighbours, so I think, at one time or another, the EU would have had to address this issue anyway,” Mr Stiglitz told a virtual event organised by the German Friedrich Ebert Stiftung think tank.
Last week the minister for finance defended Ireland’s tax policy, saying the 12.5pc rate was “fair” and within the bounds of “healthy tax competition”.
Mr Stiglitz’s comments come as talks on a global minimum corporate tax rate heat up, with a deal expected by July or October.
And US plans to repatriate multinational profits and tax them at 21pc could make Ireland’s 12.5pc rate irrelevant, if they are agreed by Congress.
Treasury secretary Janet Yellen has sent a similar proposal to the Organisation for Cooperation and Development (OECD), which is leading global corporate tax talks.
EU economy and tax commissioner Paolo Gentiloni said the American plan is “an important tool” to press for change at EU level.
“To be honest, we need, in Europe, also this kind of driver because we know the difficulties,” said Mr Gentiloni. “We have an unanimity rule on taxation and I am quite optimistic that this global boost will allow us also to overcome internal difficulties.”
“I think that the discussion will be an interesting one in the next weeks, but the American position is really changing the game.”
He said public opinion and increasing pressure by MEPs “could create new conditions to make progress in some files where we were not able to progress in the last five or 10 years”.
The European Parliament this week suggested removing national vetoes on tax, in light of an upcoming European Commission proposal on a digital levy.
It is one in a long line of MEP resolutions on taxation that are putting additional pressure on Ireland’s corporate tax regime. A resolution adopted by an overwhelming majority of MEPs earlier this year named Ireland on a list of international tax havens.
The Commission intends to come forward with a digital levy proposal by the end of June.
A strategy paper on business taxation, due to be published this week, has been delayed until next month.