The story of the tax scam has gone around the world and some at this stage, but I’ve yet to see or hear of it on Irish TV or radio, or in the print media.
Following on from my own little dabbling on this story, last week I put up some numbers relating to financial service exports in Ireland, Italy, the Netherlands, and Spain.
The figures are very rough, but we can still use them to illustrate a couple of points.
We know the figures for the amount of people involved in financial services (and software) export businesses in Ireland, as IDA Ireland lists them in its 2009 annual report.
In 2008, there were 63,932 people employed in that sector, and according to the World Trade Organisation, exports in financial and services sector amounted to $22.7 billion.
Now, I know the figures don’t match up, but bear with me here. When we put one into the other, we get $355,065 in export sales generated per employee.
This is just an exercise , and the inclusion of software in financial services workers by IDA Ireland means that the figure should be higher than $355,065, but ball-park this is what we are talking about.
Unfortunately, I don’t know how to get my hands on the employment figures for financial service exports for Spain, Netherlands, and Italy. Any help there greatly appreciated.
But, I do have, via the World Trade Organisation, the value of financial service exports for 2008 for each of those countries.
In order to have the same productivity as their Irish workers – that is $355,065 in export sales – then the following numbers have to apply.
Spain: financial service exports = $7.3 billion. Total employment = 312,000.
This means 20,559 working in financial exports in order to generate sales of $355,065 per worker. That’s around 6.5 per cent of all employees in exports, and 93.5 per cent working solely within the Spanish financial services market. No contact with the rest of the world.
Netherlands: financial service exports = $6.3 billion. Total employment = 165,000.
This means 17,753 working in financial service exports in order to generate sales of $355,065 per worker. That’s around 10.75 per cent and 89.25 per cent working solely within the Netherlands financial services market. No contact with the rest of the world.
Italy: financial service exports = $6.1 billion. total employment = 393,764.
This means 17,180 working in financial services exports in order to generate sales of $355,065 per worker. That’s around 4.3 per cent of all financial service employees in exports, with 95.7 per cent working solely within the internal Italian financial market. No contact with the rest of the world.
As my friend Donal says, there should be Ph.Ds written on how Ireland is able to achieve such productivity in financial services. Students from around the world should be queueing up to work in the IFSC in order to understand how Ireland achieves these financial miracles.
Of course, there is a reason why this is not happening.
It is because they are a fiction. A complete lie. A tax scam which was covered back in 2007 by the trade journal, International Securitization and Finance Report.
The article is in the May 2007 edition, available here.
Have a read. It’s quite enlightening and non-judgemental. It just tells you how to avoid paying tax by playing the Double-Irish.
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