At a time when European governments are stepping up aid to companies to deal with the crisis caused by the COVID-19 pandemic, questions have arisen as to whether conditions should be attached to it. On Tuesday 21 April, Manon Aubry, co-president of the GUE/NGL group in the European Parliament, was asked by EUROPE about this, and her answer was categorical: they must be accompanied by tax transparency.
“At a time when governments are wondering how to finance the crisis, at a time when some are already beginning to use the debt as blackmail, not everything is being done to combat tax evasion, and precious billions are leaking out of governments’ coffers”, she said.
It would therefore be a serious mistake to give a “blank check” to large multinationals without imposing transparency requirements on them so that the public can monitor whether they are contributing fairly to the recovery effort by investing in people and companies in EU countries and whether they are paying their fair share of taxes.
Denmark and Poland have just banned companies that are registered in tax havens from qualifying for their state aid programmes. “This is obviously a step in the right direction”, said Aubry, who urged vigilance, since these countries did not specify which list of tax havens they used. And the French MEP goes even further, arguing that this should be generalised to the European level.
According to her, large multinationals also have a role to play, particularly those, such as Amazon, that are benefiting from the crisis due to the increase in online sales and that should make an “exceptional contribution” to collectively help society deal with the crisis.
In general, the MEP believes that the crisis should be used to reorient the economy. “The crisis before us is occurring on an unprecedented scale! It should be used to reorient the economy, to help only companies that do not evade taxes, that do not pay astronomical dividends, that do not invest in fossil fuels. Tomorrow’s world economy must break with yesterday’s world economy, which has in part led us to disaster”, she said.
Putting country-by-country reporting back on the EU Council’s agenda
It is for these reasons that Manon Aubry and those responsible for this dossier in the EPP, S&D, Greens/EFA, RE and ECR groups in Parliament sent a letter in mid-April to the EU ministers on the Competitiveness Council asking them to put back on the agenda the proposal for tax transparency on a country-by-country basis (see EUROPE 12384/3), which would require companies to make public certain accounting data such as their turnover and taxes paid.
The dossier has been blocked in the EU Council for 4 years because of what Manon Aubry calls the ‘fake fight’ over the legal basis chosen by the Commission (see EUROPE 11758/9).
As of Tuesday, she had received no response to this letter. The MEP expects little from the Croatian Presidency of the EU Council, for whom the subject is not a priority (see EUROPE 12396/13), or from the incoming German Presidency, which is frankly not in favour of the text either. Perhaps the subsequent Portuguese or French presidencies will be able to make things happen, she hoped.
From her point of view, there are therefore several alternatives available to Member States for financing the crisis. First of all, working on debt cancellation, in consultation with the European Central Bank, which remains the objective favoured by her political group.
Other alternatives include raising taxes on the least volatile tax bases, such as VAT, which would be “an unfair measure that would make the poorest pay for the crisis”, points out Ms Aubry. Or ensuring that everyone actually pays their fair share of taxes, which would raise resources while being “fair”.
Manon Aubry hopes that the Member States will take the right decision. “The EU is at a crossroads, but of course it can also choose a path on which it explodes in mid-air”, she concluded.
See the letter: https://bit.ly/2VpuGyu (Original version in French by Marion Fontana)