Reacting to the new report on global tax evasion by the Global Alliance for Tax Justice, Public Services International and the Tax Justice Network, Paul Tang MEP (S&D, Netherlands) assured on Friday 20 November, that the new European Parliament Subcommittee on Tax Matters (FISC), which he chairs, is ready to play the “bad cop” within public institutions to flush out the crooks responsible for tax evasion.
The report, presented as the first of its kind and based on recently released OECD aggregate country-by-country reporting data, reveals that international tax abuses cost States more than USD 427 billion in tax revenue each year.
In the era of the Covid-19 pandemic, this is costing countries the equivalent of nearly 34 million nurses’ annual salaries each year, or one nurse’s annual salary per second, the authors point out.
Of the $427 billion lost, some $245 billion is profits transferred to tax havens by multinational corporations in order to pay less tax. The remaining $182 billion of losses are the result of wealthy individuals hiding undeclared assets and income abroad.
According to the report, the five jurisdictions that are most responsible for countries’ tax losses are the Cayman Islands (responsible for 16.5% of global tax losses, or more than $70 billion), the United Kingdom (10%; more than $42 billion), the Netherlands (8.5%; more than $36 billion), Luxembourg (6.5%; more than $27 billion) and the United States (5.53%; more than $23 billion).
”While it is excellent that the EU has a list of tax havens, this list lacks, ironically, the world’s largest tax havens. Countries on the blacklist account for only 2% of global tax losses and with the recent removal of the Cayman Islands, the EU let the world’s worst tax haven off the hook”, Paul Tang said in a statement.
The FISC Subcommittee intends to ask the EU Council to justify to the European Parliament the removal of the Cayman Islands from the European ‘black’ list in October (see EUROPE 12575/8). In addition, the MEP said that after Brexit, the EU will finally be able to critically examine UK tax practices.
The subcommittee also intends to draft a resolution calling for the strengthening of the criteria and the transparency of the process for listing non-cooperative jurisdictions on the European list of tax jurisdictions.
“The EU’s diplomatic approach has produced some good results, but it is simply not enough to deal with hardened crooks. For that you need a ‘bad cop’, also within public institutions, ready to expose and shame the practices, persons and companies involved in this theft of public resources. The FISC committee is willing to take up this role”, concluded Paul Tang.
See report: https://bit.ly/2ISiDGr (Marion Fontana)