Reinhard Biebel, Head of the Direct Tax Policy and Cooperation Unit at the European Commission, underlined the EU institution’s desire to simplify European tax systems at a conference organised by the EU Tax Observatory on Tuesday 13 May.
Michael Schick, President of the European Tax Adviser Federation (ETAF), makes no bones about it: “Tax laws are very unsystematic, hard to understand and difficult to administer”, despite the many efforts made to prevent tax fraud and tax evasion.
He assured us that the vast majority of companies want to be in good standing and are prepared to pay their fair share of tax. But “this simply requires clear tax laws” and lower compliance costs.
“We also realise that proper implementation and enforcement are crucial. Therefore we put that element a little bit higher on our agenda for the current Commission”, stressed Mr Biebel (see EUROPE 13597/11). “We will even more invest in that in terms of preventive measures, like working more closely with Member States in the transposition phase”, he said, referring to “roadmaps” for transposition.
“Ultimately, that also leads to a higher compliance, and ultimately a better competitiveness, which is also one of the key, key objectives in the internal market”, he added.
To achieve this, the laws themselves need to be enforceable, and therefore simplified. He also regretted the reduction in the number of tax inspectors: “It is important that Member States dedicate the sufficient number of resources in order to make sure that they can enforce the existing law, that’s not only related to the numbers, but also in terms of training and capacity building, because new legislation tends to be relatively complicated”.
For his part, Pierre Bachas, an economist at the World Bank, mentioned the importance of beneficial ownership declarations, which provide much better measures of the real income controlled by the richest individuals, and which have considerably reduced tax evasion. He also stressed the usefulness of digitalisation to “close the tax gap”. (Original version in French by Anne Damiani)