When the European Union decided to fine Apple €13.5 billion for tax evasion in Ireland last week, it didn’t take long for the Irish government to join with Apple to announce it would appeal the ruling.
Any change in taxation invariably raises questions about distribution. Who loses, who wins – and who loses most – will always be an issue. However, such analysis should be applied with care, lest it miss the bigger picture.
A long-term plan to cut the company tax rate from 30% to 25% is the centrepiece of the Coalition’s economic plan for jobs and growth. The Coalition maintains the change will boost GDP by more than 1% in the long-term, at a budgetary cost of $48.2 billion over the next 10 years.
During his budget speech, Treasurer Scott Morrison said the phrase “jobs and growth” 13 times. It seems he is not a superstitious man. However, Triskaidekaphobes were not the only ones left with a queer feeling after his speech. Students of the history of tax reform experienced a strange sense of déjà vu.
Over the last 50 years, African countries have lost about $1 trillion to illicit financial flows. This equates to around $50 billion a year and is equivalent to all the official development assistance received by the continent over the same period.