Ireland’s “obscene” corporate tax system is effectively taking money from developing countries and handing it to wealthy international corporations, Christian Aid Ireland has warned.

Yesterday, the UN’s Economic, Social and Cultural Rights Committee published a highly critical report of Ireland’s tax policy.

The authors concluded that the status quo is helping wealthy individuals and corporations commit tax fraud and urged the Government to “strengthen measures to combat illicit flows, cross-border tax evasion and tax fraud”.

Speaking to Newstalk Breakfast, Christian Aid Ireland Head of Advocacy Conor O’Neill said the charity is concerned about the impact on the developing world.

“If you look at some of the biggest and most egregious tax avoidances that have had Dublin at their centre, we’ve been a key hub in some of those structures and the net result really is that money is being shifted out of other countries,” he said.

“Including poorer developing countries - which is our concern - and it’s being shielded from tax.

“That is brilliant if you are a huge multinational, but for a poorer country, like Ghana say, revenue is essentially being lost that ought to be paying for things like clean water, hospitals and school.”

A family in Kenya, 27-06-22. Image: Lisa Murray/Concern Worldwide.

UCC economist Seamus Coffey disagreed and said the report focused on practices such as tax fraud that are “already illegal under Irish law”.

He also claimed the main impact of the State’s low corporation tax regime was that American companies had decided to headquarter themselves in Ireland.

“There’s no rule that one country can pass to restrict or reduce tax revenues in another country,” Mr Coffey said.

“Countries can collect their tax revenue based on the rules they have, so Ireland has obviously used relatively low corporate tax to attract investment.

“But in terms of general application… It’s all US companies; it’s the Apples, Facebooks, the Googles, Intels, Pfizers.”

The entrance to Apple's European Headquarters in Cork in the city of Cork, Ireland, on September 06, 2016. Apple's European Headquarters are based in Cork. Photo: Eoin O'Conaill/dpa

Mr O’Neill disagreed and said his charity was aware of companies paying a corporate tax rate as low as 4% - a practice he labelled “obscene”.

“We published research showing how a particular pharmaceutical giant, based in Ireland, using a very specific and live tax avoidance tax structure, is able to legally reduce their tax bill made on things like COVID and HIV testing kits and essentially shift that money out of countries like Ethiopia and Nepal,” he said.

In Budget 2023, Finance Minister Michael McGrath revealed corporation tax receipts make up 27% of Ireland's entire tax take.

Main image: A group of women and girls walk along a road in Northern Kenya on 27-06-22. Image: Lisa Murray/Concern Worldwide.