Bono's hypocrisy on Africa and corporate tax avoidance in Ireland has been starkly exposed, at a time when the Dutch government has proposed to reform the tax haven company letter-box system used by not only rock groups such as U2 and the Rolling Stones but 23,000 other entities that for example surreptitiously hide trillions of dollars worth of transactions annually, related to regions such as Africa. The Netherlands has also proposed to renegotiate tax treaties with 23 low-income countries in order that anti-abuse provisions be included in new treaties.
Multinational companies routed €10.2tn in 2010 through 14,300 Dutch “special financial units,” according to the Dutch Central Bank.
Bono, the U2 frontman and anti-poverty campaigner, is reported by The Irish Times to have defended Ireland’s tax system and the use of Irish companies by multinational giants to reduce their global tax bills, saying that the country was “very pleased to compete on that front.”
At the annual meeting in New York of the Clinton Global Initiative, the Clinton family's philanthropy for developing world projects, Bono interrupted Mo Ibrahim, the Sudanese telecoms billionaire, who during a discussion on Africa, referred to Ireland as an example of how the global taxation system was broken.
U2 for 20 years availed of a 1960s era income tax exemption that was introduced to aid indigent artists and in 2006, in response to the ceiling on its tax-free status, the rock group moved its prime money-making unit to the Netherlands.
Paul McGuinness, the manager of the group, said at the time that Bono and U2 "continue to remain Ireland-based and are personal investors and employers in the country."
Last week-end, Bono claimed that U2's tax strategy was consistent with Ireland's tax competitiveness policy.
“U2 is in total harmony with our government’s philosophy,” he told The Observer newspaper. “Tax competitiveness has taken our country out of poverty. [The revenue] accept that if you engage in that policy then some people are going to go out, and some people are coming in.”
He added: “At the heart of the Irish economy has always been the philosophy of tax competitiveness. On the cranky left that is very annoying, I can see that. But [that] is why Ireland has stayed afloat.”
The Irish Times reports that President Clinton asked the panel group in New York on Tuesday, that included Bono, how big companies such as Google could best use their money in African communities. Mr Ibrahim said, in an impassioned plea, that big companies should pay taxes in Africa.
“All those big companies don’t pay taxes in Africa. That is just not acceptable,” he said. “People need to stand on that issue. Frankly, the whole taxation system around the world is really broken because business gone global but our taxation system is still country-based and then countries compete.”
At the heart of Bono's hypocrisy in New York was his criticism of extractive companies including ExxonMobil, the oil major, for opposing US transparency laws aimed at forcing companies to report how much they pay African states on oil, gas and mining projects to encourage the proper flow of wealth to citizens in those countries.
These companies use the same Dutch schemes that enable Bono escape paying tax on about 95% of his income.
The Guardian reported in 2011 that a report by tax campaign group Publish What You Pay Norway found that more than a third of the subsidiaries owned by major energy and mining companies -- including Shell, BP and Glencore - - were based in "secrecy jurisdictions" where company accounts are not publicly available.
The Irish Independent reported on Tuesday that Richard Bruton, jobs minister, refused to comment on U2's tax affairs.
This claim is dependent on what the term 'transparent' means? My common-sense definition suggests that the claim is false.
While the Revenue has been tracking down personal offshore accounts for more than 20 years, nobody was aware of massive corporate tax avoidance? Nobody at the Revenue ever queried multi-billion dollar charges from places like Bermuda and the Cayman Islands?
Apple last filed accounts with the Irish Companies Office in 2005; Intel and Pfizer do not publish accounts in Ireland as they are branch operations of Cayman Islands and Dutch firms.
Of course the minister knows that the "unseen" corporate tax avoidance, was an example of what the Irish used to call "Bodhaire Uí Laoire" -- the deaf ear or blind eye.
As for Bono, he surely knows that he inhabits the credibility gap between being an international rich man who lives in many places but pays little in taxes while also being an anti-poverty campaigner.
...and behind those shades, it must hurt to have to defend massive tax avoidance by big western companies in response to a plea for fairness for Africa, from a successful African businessman.
Sheryl Sandberg, chief operating officer of Facebook, on Bono's right, is also familiar with the advantages of the 'Dutch Irish sandwich' tax dodge, as about half of Facebook's global revenues are booked in Dublin:
SEE also 2013 reports:
Related tax links
© Copyright 2011 by Finfacts.com