Parliament and Council must ensure that proposed Committee of Inquiry has real power to address tax evasion

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GUE/NGL MEPs are calling on both the European Parliament and the European Council to create a new Committee of Inquiry with the power to effectively address tax evasion.  
 
The GUE/NGL group, which has always been outspoken on the need for robust measures against tax avoidance and offshore secrecy, has been instrumental in putting this issue high on the agenda of the European Parliament, including calling for a plenary debate and for the establishment of a Committee of Inquiry specifically on the issue of the Panama Papers.
 
GUE/NGL has welcomed the announcements of the S&D and ALDE groups within the Parliament supporting the establishment of a Committee of Inquiry and calls on the Conference of Presidents to follow suit and adopt a strong mandate for the committee on Thursday.
 
GUE/NGL Coordinator on the European Parliament's Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE 2), Fabio De Masi, stated: "For a long time we have been calling for a real Committee of Inquiry in the European Parliament to investigate tax evasion issues. We need a permanent committee with real power and access to documents."
 
De Masi highlights, however, that additional action is required from the European Council: "For the Committee of Inquiry to work effectively, the European Parliament as a whole must put increased pressure on the Council and the Commission to consent to the long-time pending regulation on Committees of Inquiry. Unless this regulation is adopted, a new committee to address the Panama Papers issue risks being as powerless as the Special Committee on Tax Rulings (TAXE) which was unable to effectively address tax avoidance by multinational companies in Europe."
 
In addition to a Committee of Inquiry and Council resolution, the GUE/NGL group is calling for multiple measures to address tax evasion:
·         a permanent sub-committee for tax matters to maintain a high level of pressure on member states and the European Commission;
·         source taxation by member states on financial flows into offshore tax havens (such as Panama and the British Virgin Islands);
·         meaningful sanctions from member states such as the revocation of business licences against those banks and lawyers assisting tax evaders and money launderers;
·         country-by-country reporting to be extended beyond the EU to all countries where multinationals that operate across borders pay tax; and
·         a publicly accessible company register showing the ultimate beneficiaries of all corporations, foundations, trusts and similar structures.
 
"This will require decisive action from the European Parliament, the European Council, the European Commission and the member states," explains De Masi.
 
Addressing the consequences that lack of action could bring, De Masi adds: "We see that the Islamic State have been able to launder money through the same channels that have been used in the Panama Papers and this funded the recent attacks in Brussels. If we don't act, then we are enabling this to continue."
 
Vice-Chair of the European Parliament's Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE 2), Marisa Matias, adds: "By maintaining offshore tax havens, Europe sends a clear message to citizens: those who evade taxes of one hundred euros are criminals, those who run away with one hundred million are entrepreneurs.
 
"The time to put an end to this immorality is long overdue. We need a Committee of Inquiry with the power to investigate this scandal deeply."
 
Portuguese MEP, Miguel Viegas, also comments: "This tax scandal draws our attention to a long-standing reality. In the past we have had Luxleaks, the Swiss Leaks, the Offshore Leaks, and now we have the 'Panama Papers'."
 
"This reality cannot be dissociated from the emergence of the neoliberal paradigm and the deregulation of the financial system that have dominated the world economy since the 1980s. It also cannot be dissociated from the wave of privatisations of the public financial institutions that were created after World War II. We cannot forget that the free movement of capital has facilitated even more possibilities for tax evasion."
 
"This scandal is not an accident. It is a structural phenomenon that requires substantive measures to end tax havens, and to attack the heart of the capitalist system that underlies the banking and financial institutions," concluded Viegas.