Christian Aid today sounded a note of caution in response to proposals to reduce the rate of corporation tax in Northern Ireland.
One risk that does not seem to have been adequately considered is the impact that Northern Ireland’s tax policies may have on other jurisdictions and particularly on developing countries.
David Thomas, Christian Aid’s Campaigns Coordinator in Belfast, said, ‘Many low tax jurisdictions are used by companies to shift profits between subsidiaries around the globe – including in some cases from some of the poorest countries in the world. Christian Aid estimates that developing countries lose as much as US$160 billion each year as a result of tax dodging.’
"Lack of transparency around the activities of multinationals make it difficult to detect these damaging practices. We are concerned that a low corporation tax rate will encourage such behaviour and leave poor countries even poorer."
"At the very least Northern Ireland needs to conduct a spill-over analysis of any proposed changes to their tax rate, to ensure that there is no possibility of it inadvertently damaging poor countries".
Christian Aid is also calling for greater transparency from multi-national companies in their activities, to help detect instances of profit shifting.
Mr Thomas continued, "We would like to see the introduction of 'country by country' reporting – an accounting standard that would require multi-nationals to report on all their activities in each of the countries in which they operate."
"There is a risk that, without adequate levels of company transparency, a low corporation tax rate in Northern Ireland could attract companies wishing to use that rate in order to avoid their tax responsibilities elsewhere. The experience of the Republic of Ireland is that the abuse of various tax related incentives has resulted in poor countries losing revenue that is rightfully theirs."
"Northern Ireland has a responsibility to ensure that it does not develop its own economy to the detriment of others and particularly not at the expense of some of the poorest countries in the world where tax revenue is desperately needed to provide essential public services such as education and healthcare."
For more information, or for an interview with David Thomas, please contact on Adrian Horsman in Belfast on (028) 906 99 123 (direct), (+44) 07710 764 093 (mobile) or email email@example.com.
Notes to editors:
1. Christian Aid works in some of the world's poorest communities in around 40 countries at any one time. We act where there is great need, regardless of religion, helping people to live a full life, free from poverty. We provide urgent, practical and effective assistance in tackling the root causes of poverty as well as its effects.
2. Christian Aid’s core belief is that the world can and must be changed so that poverty is ended: this is what we stand for. Everything we do is about ending poverty and injustice: swiftly, effectively, and sustainably. Our strategy document ‘From Inspiration to Impact’ outlines how we set about this task.
3. Christian Aid is a member of the ACT Alliance, a global coalition of more than 130 churches and church-related organisations that work together in humanitarian assistance, advocacy and development. Further details at http://actalliance.org
4. Follow Christian Aid Ireland on Twitter: www.twitter.com/christianaidirl
5. For more information about the work of Christian Aid, visit www.christianaid.ie