Panama Papers & Tax Avoidance: Pressure on the rich and powerful
A press release of Fabio De Masi
The plenary of the European Parliament has today adopted a mandate for a committee of inquiry into the Panama Papers scandal. At the same time, MEPs voted on a bill containing a toolkit of measures to fight corporate tax avoidance which the European Commission had proposed in January 2016 based on the OECD BEPS (Base Erosion and Profit Shifting) Project.
GUE/NGL coordinator for the TAX2 special committee, Fabio De Masi, comments:
“A strong mandate for the inquiry will help to put pressure on tax evaders and money launders. Our group managed to include a much needed revision of the EU’s anti-money laundering and automatic information exchange provisions. The current rules allow for opaque nominee directors in letterbox companies and exclude widely used trusts from information exchanges. We need full transparency and strong rules now. The German government has to give up its blockade of a public registry for the ultimate owners of companies and other legal structures.
It also is the hypocrisy of the EP’s grand coalition to go for a full inquiry now while having prevented a political investigation into the LuxLeaks, protecting the architects of EU tax havens like Commission President Juncker. And even the new committee will remain a blunt sword if the Parliament’s rights to inquiry, as enshrined in the treaties, are not honoured. Council and Commission keep blocking a proposal on the matter which was voted in 2012 by the entire EP.”
De Masi concludes: “After each scandal we hear talk of reforms, but when it comes to deciding on meaningful reform, the majority in this house backs in. The anti-BEPS directive ends up with provisions on fictive interest which are in part weaker than what the Commission proposed and what the US already apply. Much needed coordinated source taxation of financial flows into tax havens was rejected as was a phase-out of the harmful patent boxes, which even the OECD explicitly label as bad economic policy. They help tax avoidance while not enticing any additional research activity. The Commission’s much touted blacklisting exercise against tax havens will be a diplomatic nightmare and ineffective if it does not cover jurisdictions like Delaware and Nevada in the US, or comes without proper enforcement sanctions. Public country-by-country reporting needs to apply universally and should be delinked from the blacklisting.”