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Peter Flanagan: Only a strong response can limit damage to our reputation

IF you are an Irish politician trying to sell this country overseas, it was probably best if you avoided the US Senate hearings into Apple's tax affairs yesterday.

The hearings were nominally about how Apple avoids paying billions of dollars in corporation tax and how the US tax laws need to be reformed.

In truth though, anyone tuning in could easily have thought the hearings were on Ireland's role as a tax haven for international business.

The US does not officially classify us alongside the likes of Bermuda and the Cayman Islands but that did not deter the powerful Senator Carl Levin.

Taoiseach Enda Kenny and the rest of his Cabinet can bluster all they want about the fact that we aren't officially a haven, but the argument is now over. That is how the world views us. Official definitions are mere semantics.

Yesterday no other country was mentioned at the hearings except for Ireland. There was no mention of notorious places like the Bermuda and the British Virgin Islands, but that is the kind of country we are now classed as.

The Government now has a decision to make. Does it come out strongly for the reform of international tax laws, or does it try to keep its head buried in the sand?

The Government needs to come out strongly for the reform of international tax laws.

Multinationals are incredibly important to our economy – they employ some 150,000 people and counting – but we can't allow that fact to mean we stand by and watch our reputation dragged through the gutter.

In the past week alone we've had wall to wall coverage of how Google, Marks & Spencer and now Apple use Ireland to legally avoid tax.

Even last night it emerged that Actavis, a pharmaceuticals firm, will reduce its tax rate from 37pc to 17pc after buying the Dublin-based firm Warner Chilcott.

Do we have anything to offer the world apart from a dodgy tax set-up?

Right now, it would be easy to think not.

Today the European Commission will hold a summit on stopping tax avoidance that is believed to cost the EU about €1 trillion a year. Ireland would do well to support whatever measures come out of that meeting.

Irish Independent