Wednesday 21 March 2018

There is such a thing as bad publicity

Colm Kelpie

Colm Kelpie

TRINITY Professor Frank Barry told an Oireachtas Committee this week that the tax controversy surrounding Ireland appeared to be doing little harm to our reputation among big corporations.

At least that was the sense he was getting from industry insiders, he said. That may very well be true, at least for now.

One could argue in fact that the controversy advertises Ireland as a destination of choice for international companies to legally reduce their tax liabilities (assuming, which is quite unlikely, that they don't know it already).

But there is little question that the drip-drip nature of the reports is a damaging thing, diplomatically at the very least.

At a time when Ireland is showcasing itself to the world as the first country to successfully exit a joint EU/IMF bailout programme – and seek concessions from Europe on that basis to ease our crippling bank debt – we could have done without the negative coverage.

Now the SAP story has added an even more uncomfortable element to the controversy. Much of the debate has so far focused on US multinationals, but the SAP revelations highlight that European corporations are using the same techniques.

German Finance Minister Wolfgang Schaeuble apparently didn't know that German companies were at the same game, according to a letter obtained by Reuters.

There was a sense earlier this week, when the Department of Finance and Revenue were being questioned by the Oireachtas sub-committee on global taxation, that the State was once again burying its head in the sand.

Officials were quick to declare that there were no special tax deals for multi-national companies operating here.

But at a time when Europe is already probing our tax arrangements with multi-nationals, a shift in focus to corporations on this side of the Atlantic isn't welcome and could lead to awkward questions from an emboldened Germany.

Shrugging your shoulders and claiming you've done nothing wrong will not wash for much longer. A more robust PR strategy is needed.

Irish Independent

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