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Tax havens: Where the cheats have no shame

For all the high-profile anti-poverty advocacy of its frontman, Bono, Irish rock band U2 has copped a hiding from compatriots for tax evasion in their homeland.

Though all four band members live in Ireland, the band's publishing arm relocated to the Netherlands in 2006, after Ireland capped tax-free earnings for artists at €250,000.  Meanwhile, ordinary Irish taxpayers face rising unemployment and hardship.

U2's Dutch tax scheme has been criticised by the Debt and Development Coalition Ireland (DDCI), comprising 70 organisations including Concern, Trocaire, Oxfam and a number of Catholic missionary orders.  Says Coalition spokesperson Nessa Ní Chasaide:

"Bono may campaign for a better deal for the world's poor – but his band are taking advantage of the same tax avoidance schemes that rob impoverished countries of billions. . . We need international action to ensure that everyone pays and pays their fair share.”

The Coalition argues that if U2 paid more tax at home, Ireland could spend more on overseas aid.

DDCI is using the occasion of the band's new album launch this week to highlight their objections.  They have launched a song competition in Dublin seeking parodies of U2 songs to highlight tax justice.  A satirical version of Where the Streets Have No Name is performed live here (8-minute video):

The street theatre protest seems to have provoked a response from the supergroup.  Manager, Paul McGuiness, rejects accusations of hypocrisy and tax evasion.  Speaking to The Belfast Telegraph, he said U2 pays taxes in a number of countries:

"At least 95% of U2's business — including record and ticket sales — takes place outside of Ireland and as a result, the band pays many different kinds of taxes all over the world . . . Like any other business, U2 operates in a tax-efficient manner."

U2 Ltd paid more than €21 million in wages in 2007.  McGuiness insists U2 is "fully compliant" with Irish tax legislation.

No-one said anything about them breaking the law.  The point to be made is surely one of the morality of taxation law, and congruence between Bono's political activism and business practice.

"U2 is just one part of the problem.  This is a much wider and systemic problem in our global financial system.  Every company and individual has the responsibility to pay the right amount of tax," says Ní Chasaide.

Christian Aid estimates that impoverished countries lose US$160 billion every year as a result of tax avoidance by companies operating within their jurisdiction.  Closing the net on these tax evaders could save the lives of 350,000 children under five every year.  Recommended reforms include:

  • requiring transnational businesses to reveal publicly what they pay in tax in every country where they do business, in order to easily identify abuses.

  • a global agreement forcing secret tax havens such as Bermuda, Switzerland and the Isle of Man to share information with tax authorities in other countries.

Ireland's Minister for Finance Brian Lenihan admits there is a problem with these havens, and promises to press for reforms within the EU.  UK residents are encouraged to e-mail your local MP on these issues.

The Irish Times plans to publish an interview with U2 band members addressing the criticisms on Friday.


  1. 2 March 2009 | 8:34 am

    Bono’s right of reply:

    “We pay millions and millions of dollars in tax,” says Bono. “The thing that stung us was the accusation of hypocrisy for my work as an activist.

    “I can understand how people outside the country wouldn’t understand how Ireland got to its prosperity, but everybody in Ireland knows that there are some very clever people in the Government and in the Revenue who created a financial architecture that prospered the entire nation – it was a way of attracting people to this country who wouldn’t normally do business here. And the financial services brought billions of dollars every year directly to the Exchequer.

    “What’s actually hypocritical is the idea that then you couldn’t use a financial services centre in Holland. The real question people need to ask about Ireland’s tax policy is: ‘Was the nation a net gain benefactor?’ and of course it was – hugely so. So there was no hypocrisy for me – we’re just part of a system that has benefited the nation greatly and that’s a system that will be closed down in time. Ireland will have to find other ways of being competitive and attractive.”

    In a 2007 report entitled Death and Taxes: The True Toll of Tax Dodging , the development agency Christian Aid examined the impact of tax avoidance on the developing world and mentioned Bono as one of the people responsible. When a group such as Christian Aid (with whom Bono would have some common cause) criticise the move, that must hurt?

    “It hurts when the criticism comes in internationally,” says Bono. “But I can’t speak up without betraying my relationship with the band – so you take the shit.”

    excerpt from an interview with Brian Boyd, The Irish Times, 27 Feb. 2009

  2. 23 March 2009 | 1:48 pm

    A McKinsey estimate is somewhat lower than ChristianAid’s, but Oxfam provides a worthwhile comparison with aid monies flowing from North to South:

    “Developing countries miss out on tax receipts worth more than the billions of dollars in foreign aid they receive because their own nationals put cash in offshore tax havens, British charity Oxfam said on [13 March 2009].

    “Developing countries lose as much as $124 billion in taxes a year, more than their yearly $103 billion in foreign aid, a study for the charity showed.

    “People from developing countries hold more than $6.2 trillion abroad and capital flight is increasing by $200-300 billion per year, according to the study for Oxfam by a former chief economist at management consultancy McKinsey & Co.

    “Reform of tax havens would be an easy win for our leaders that would benefit ordinary people at home and abroad alike,” Kristy Hughes, Oxfam’s head of policy, said in a statement, noting that $16 billion would provide each child a school place.

    “Combating offshore tax evasion is on the agenda for the April 2 G20 group of developed and emerging countries in London.

    “The global financial crisis has seen cash-strapped Western governments taking tougher steps against tax evaders and the crisis also looks set to crimp development aid.”


  3. Anonininer
    9 April 2009 | 12:03 am

    De afgelopen jaren zijn de Belgische autoriteiten in samenwerking met de omliggende landen er in geslaagd illegale wapenhandel behoorlijk terug te dringen door intensieve controle aan de bron.
    De meeste wapens verdwijnen via de tussenhandel naar Oost Europa in het algemeen via de Nederlandse grenzen.
    De samenwerking met andere landen heeft inmiddels goede resultaten opgeleverd.
    Mees van den Bogert, geboren te Rotterdam, ongeveer 52 jaar oud en mogelijk woonachtig in Zuid- Holland of Zeeland wordt door de Belgische politie gezocht voor genoemde wapenhandel.
    De politie is de man op het spoor en een aanhouding wordt binnenkort verwach



  4. ManuDibango
    9 April 2009 | 12:29 am

    Ondernemer Mees van den Bogert, geboren te Rotterdam, ongeveer 50 jaar oud en mogelijk woonachtig in Zuid- Holland wordt door de politie gezocht voor wapenhandel en belastingfraude. De politie is de man op het spoor en een aanhouding wordt binnenkort verwacht

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