He talks the talk, but doesn't really walk the walk....
Bono has regularly called for greater transparency from foreign corporations operating throughout Africa, slamming companies such as Exxon Mobil for not paying taxes in countries where they operate, or not fully disclosing what they pay governments for contracts.
"The countries of Africa are extremely rich in resources, but why are they poor?" Bono asked during a speech at last year’s Clinton Global Initiative in New York City.
"These rich extractive industries aren't returning the wealth to the people in any kind of fair measure. You can't have it both ways. You can't give alms to the poor on one hand and have your hands on their throat on the other."
Can’t disagree with that logic or sentiment, but….. hold on one minute, does the Irish-born musician, who has an estimated personal net worth of $600 million, just talk the talk, or does he also walk the walk, when it comes to his own tax affairs?
That’s a subject that came under the spotlight once again last month, after Bono defended Ireland’s corporate tax rate of 12.5%, claiming it’s brought the country “the only prosperity we’ve known.”
“We are a tiny little country, we don’t have scale, and our version of scale is to be innovative and to be clever, and tax competitiveness has brought our country the only prosperity we’ve known,” Bono said.
“That’s how we got these [tech] companies here. Little countries, we don’t have natural resources, we have to be able to attract people. We’ve been through the 50s and the 60s, and mass hemorrhaging of our population all over the world. There are more hospitals and firemen and teachers because of [Ireland’s tax] policy.”
However, one of the major workers’ unions in Ireland sees things rather differently to the musician.
“The one in four who suffer deprivation as well as the tens of thousands of others having to put up with six years of austerity will regard Bono’s remarks with total derision, it is the only word anyone could use to describe what he has said,” Unite spokesman and economist, Mike Taft, told the Guardian.
“Where else can you begin with his defense of this low corporation tax regime? As well as the one-in-four, it is worth pointing out that wages in Ireland are well below the European average and for six years we have seen public services smashed apart due to austerity cuts, and here we have Bono talking about low corporation tax bringing us prosperity.”
Yeah, and then there’s the fact that U2 doesn’t actually pay any tax itself in Ireland—seems Bono is confident that the 12.5 % tax (and often way lower courtesy of controversial “double Irish” tax avoidance schemes) his pals at Apple and Google pay, is way more than enough to keep his fellow Irish in the prosperity he believes they currently live in—because, back in 2006 the band moved their global music empire to the Netherlands, where they pay an even lower rate of tax, and enjoy the benefits of less stringent transparency laws.
Just like Exxon Mobil! They too pay taxes in the Netherlands—the very subject Bono took umbrage at during his speech at the Clinton Global Initiative last year!
“It's hard not to notice the credibility gap that's presented by being an ‘international’ multi-millionaire who pays such a low rate of tax, whilst also being an anti-poverty campaigner," Calder says.
“For twenty years U2 used a tax exemption scheme in their native country Ireland. The scheme was introduced in the ‘60s to help indigent artists and it significantly reduced the band’s tax bills. When this exemption was curtailed in the ‘90s U2 moved the lucrative publishing arm of its operation to the Netherlands. As a result they now enjoy a much lower tax rate—between just 3-5 percent.
“Bono defends the decision to move the band’s business side out of Ireland by explaining they were simply acting like any other business and that there’s a ‘social benefit’ to paying low taxes. He claims U2 is in total harmony with the Irish Government’s philosophy and that tax 'competitiveness' has taken Ireland out of poverty. He blames the ‘cranky left’ for not appreciating the band’s position. Odd then that he would criticize governments around the world for not giving enough to help bail out the poorer nations, all while denying his own government in Ireland U2’s tax dollars to help his own people—It’s worth noting Ireland was hit hard by the Global recession, and has been suffering an economic crisis since 2008, resulting in a 67.5 billion Euros bailout by the IMF."
That’s a fact that hasn’t gone unnoticed by many in the Republic. Former Irish Junior Health Minister Roisin Shorthall spoke out on the subject back in 2006, after U2 announced their business move to the Netherlands.
“I think there is that issue about loyalty to the country you are born in and I think it would show a tremendous example to everybody if they were to bring back their tax affairs to Ireland. In any modern democracy people pay their fair share of tax.”
“Another example of Bono’s hypocrisy is his criticism of extractive companies such as Exxon Mobile opposing transparency laws aimed at forcing companies to report how much they pay to African States on oil, gas and mining projects,” Calder continues. “It’s a very valid criticism, until you realize that those companies use the very same Dutch tax avoidance schemes that enable U2 to pay such low tax on their earnings.
“At last year’s Clinton Global Initiative Mo Ibrahim, a Sudanese Telecoms billionaire, stated that the first thing global tech corporations could do to benefit Africa is to ‘pay their taxes’ and he referred to Ireland as an example of how the global taxation system was broken—it’s estimated that tax avoidance costs the developing world at least $160m every year—yet, Bono, who professes to care so much about eradicating poverty continues to defend Irish tax laws, and to use other, even lower rate tax havens to protect his own massive wealth.
"Now, no-one is saying that U2 and Bono are doing anything illegal in any way, because they’re not—many companies in the U.S. employ similar tax-reduction tactics, such as registering in Nevada to take advantage of the state’s low corporate tax rates—however, if you are going to play world savior and point the finger of blame at others, you may want to take check of your own moral affairs first."
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