25/10/21

IRELAND: Jurisdiction has become Facebook’s ‘launderette’ for tax avoidance, Denis O’Brien claims.

As published on irishtimes.com, Sunday 24 October, 2021.

Ireland has become Facebook’s “launderette for the biggest tax avoidance scheme in the world,” businessman Denis O’Brien has claimed.

The relationship between Ireland and Facebook, which the social media company uses at its European headquarters, was a “blot” on the country’s reputation, Mr O’Brien said.

He made the comments about the social media firm at Cambridge University, during an annual lecture in memory of late Fianna Fáil minister for finance Brian Lenihan, who was a graduate of the university, and who died in 2011.

In a series of critical remarks Mr O’Brien said democracy was “under threat” from Facebook, which he claimed was “allowing its platform to facilitate anarchy”.

“Ireland is a pivotal partner of Facebook because of its tax laws and regrettably is complicit with the egregious practices Facebook operates under,” he said.

Mr O’Brien owns Caribbean mobile phone network Digicel, and was majority shareholder in Communicorp, a radio group that included stations Today FM and Newstalk, which was sold to UK-based Bauer Media Audio earlier this year.

He also previously held a significant stake in Independent New & Media, which published the Irish Independent and other newspapers, and which was later bought by Belgian group Mediahuis.

“Many people will say that multinationals, like my company Digicel, are new colonialists,” he said.

The businessman said Digicel made profits in countries such as Haiti but also had a responsibility to the development of the Caribbean country.

“We make profit in Haiti and happily pay corporation tax, sales tax and all other taxes,” he said.

“If you take the continent of Africa alone, Facebook generates the equivalent of one dollar per month per Facebook user and generates billions in advertising revenue across 54 countries.

Mr O’Brien criticised the company over its lack of corporation tax paid in Africa. “It is the most unbelievable and amoral business model one could ever imagine,” he said.

“Ireland regrettably has allowed itself to become Facebook’s launderette for the biggest tax avoidance scheme in the world,” he told the lecture.

Mr O’Brien said the company was “insidious”, and its platform had a role in spreading misinformation and hatred.

Facebook’s practices and policies have come under renewed pressure in the United States in recent weeks, after a number of whistleblowers came forward to criticise the company’s approach to user safety and efforts to tackle hate speech.

The Irish businessman said the current Facebook controversy reminded him “of what Germany experienced with creeping authoritarianism, which few people called out”.

The social media company had “become nearly too big to challenge,” and no single government would be able to rein it in alone, he said.

A spokeswoman for Facebook said the company would not be commenting on Mr O’Brien’s speech.

However, the spokeswoman outlined that Facebook “comply with international tax rules and we pay all the taxes required in each of the countries in which we operate.”

The company paid $4.23 billion in corporate income taxes last year, mostly in the US, she said.

“Over the last decade, business models have changed significantly and tax rules have failed to keep up. That’s why we have long called for reform of the global tax rules and have wanted the international talks to succeed. We accept that may mean we have to pay more tax and pay it in different places,” the spokeswoman said.

The social media company was involved in a number of projects in Africa to improve broadband, 4G and 5G access, including a large subsea cable project, 2Africa cable. It is also involved in fibre projects in Uganda and the Democratic Republic of Congo, it said.

Facebook opened its first office in Africa in Johannesburg, South Africa in 2015, and an office in Lagos, Nigeria in 2020.