ROME, Italy - Poland, Ireland and the United States have very different experiences with taxation issues and at the same time there is a similarity. In a presentation at the 2005 Rome WOCCU World Conference Gryegorz Bierecki, WOCCU Director and head of the National Association of Cooperative Savings and Credit Unions (NASCU) in Poland; Dan Mica, CUNA CEO; and Kevin Helferty of the Irish League of Credit Unions told their stories. Bierecki, creator of the Polish credit union movement opened the first credit union in 1992.They were originally taxed. However, when the government saw the services they were performing, they decided to eliminate the tax in 1998, but with the arrival of many foreign banks, there is pressure on the government to re-establish the tax. The credit unions will fight. The Irish situation is slightly more complicated. Both Northern Ireland and the Republic of Ireland are served by the Irish League of Credit Unions. In Northern Ireland, credit unions pay taxes on their investment income, but in the Republic of Ireland they do not. This is because the credit unions in each country are under two regulatory agencies. However, in the Republic of Ireland, members are taxed on interest income. Mica told of the constant battle with the banks saying that the first battles were on substance and rationality. If the facts that credit unions are nonprofit and often service members that banks do not want to handle doesn't help, then the next step is to take the battle to Congress as they have done many times. Because there are so many members in each state, the ability to organize lobbying power has made credit unions successful in keeping taxation at bay. However, it is an ongoing battle. He feels that credit unions serve a secondary role in keeping bank fees down and floated the theory that that could be one of the reasons that banks are fighting so hard. Issues like small business loans that credit unions can now make have caused the banks to fight harder, although many of those loans are too small for a bank to consider. Some bank conversions from credit unions have also confused the issue, but Mica challenged any bank to convert to a credit union if they want the so-called advantages CUs have. The panel was asked by Rob Nicholls, an Australian (credit unions are taxed there) CU professional, if they thought that paying taxes was part of their social responsibility. All three panelists said that servicing people who would otherwise not be serviced fulfilled a far greater responsibility than what the taxes would cover. However, the panel also said that as credit unions grow bigger, they must remember that they do have a responsibility to the poorer members of their community. Biericki said that a credit union, however, can not only be a poor person's bank. They must attract and serve members with healthier incomes so they can help all people. Two statements stood out. Mica said, "The private sector can not prosper when society fails," and "Banks use people for profit. Credit unions use money for people." -firstname.lastname@example.org
A Tale of Taxation in Three Countries: the U.S., Ireland and Poland
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