Par­adise Pa­pers: EU mem­bers should crack down on tax dodg­ing

Financial Mirror (Cyprus) - - FRONT PAGE -

All EU coun­tries should take steps to clamp down on tax avoid­ance schemes, MEPs said on Tues­day dur­ing a de­bate on the Par­adise Pa­pers scan­dal.

The Par­adise Pa­pers is the lat­est leak of doc­u­ments that show how mil­lion­aires and in­ter­na­tional cor­po­ra­tions hide their wealth and try to avoid pay­ing their taxes.

The 13.4 mil­lion leaked files from off­shore law firm Ap­pleby were pro­cessed by the In­ter­na­tional Con­sor­tium of In­ves­tiga­tive Jour­nal­ists. Me­dia out­lets from all over the world started pub­lish­ing rev­e­la­tions at the be­gin­ning of Novem­ber.

In April 2016 leaked doc­u­ments from Panama law firm Mos­sack Fon­seca pro­vided an in­sight into how politi­cians, busi­ness­men, crim­i­nals and pub­lic fig­ures use off­shore schemes to hide their as­sets from pub­lic scru­tiny.

Two years be­fore that, in April 2014, the LuxLeaks scan­dal showed Lux­em­bourg of­fered large cor­po­ra­tions pref­er­en­tial tax treat­ment.

Dur­ing the de­bate in Stras­bourg on 14 Novem­ber, many MEPs com­mented on the role of the state. “I hope this new leak has opened the eyes of those mem­ber states who had not com­pre­hend the mag­ni­tude of the prob­lem,” said Czech ALDE mem­ber Petr Jezek, one of the au­thors of the fi­nal re­port by Par­lia­ment’s com­mit­tee in­ves­ti­gat­ing the Panama pa­pers.

Ger­man ECR mem­ber Bernd Lucke asked: “How come we need in­ves­tiga­tive jour­nal­ists to re­veal all this? What are na­tional tax au­thor­i­ties up to?”

Matti Maasikas, rep­re­sent­ing the Coun­cil, said: “The leaks are in­stru­men­tal for in­formed pol­i­cy­mak­ing and po­lit­i­cal de­ci­sions. A fairer tax sys­tem is what cit­i­zens ex­pect from us.”

Pierre Moscovici, the com­mis­sioner for tax­a­tion, said he was shocked but not sur­prised about the rev­e­la­tions: “For quite a while now we know that multi­na­tional com­pa­nies and well-off tax pay­ers and banks have been work­ing hand in glove to re­move all sorts of earn­ings from the pub­lic light.”

He added: “If this is le­gal - as some claim - then we need to change the law with the help of this Par­lia­ment.”

Ac­cord­ing to Aus­trian ENF mem­ber Bar­bara Kap­pel the EU had made sig­nif­i­cant progress over the last few years: “There are now many in­stru­ments avail­able to com­bat tax avoid­ance and it seems to me that you won’t find any Euro­peans in the Par­adise pa­pers apart from Brits.”

A num­ber of MEPs un­der­lined the threat posed by un­fair tax prac­tices. Czech EPP mem­ber LudÂk Nie­der­mayer said: “The ex­ten­sive use of loop­holes in tax sys­tems and the in­ten­tional or un­in­ten­tional cre­ation of spe­cial tax regimes are harm­ing our econ­omy, harm­ing com­pe­ti­tion, in­creas­ing in­equal­ity, and as re­sult, peo­ple are los­ing trust.”

Belgian Greens/EFA mem­ber Philippe Lam­berts said: “Tax avoid­ance is not just un­der­min­ing the pub­lic sys­tem, but also democ­racy.”

Ital­ian S&D mem­ber Gianni Pit­tella called at­ten­tion to the need to tackle the fa­cil­i­ta­tors of tax dodg­ing: “The com­pe­tent au­thor­i­ties should sus­pend or re­voke bank­ing li­censes of fi­nan­cial in­sti­tu­tions and ad­vi­sors who are com­plicit in or­gan­is­ing tax eva­sion.”

Span­ish GUE/NGL mem­ber Miguel Ur­bán Cre­spo added: “How long are we go­ing to tol­er­ate this and not have de­ter­rents and sanc­tions such as re­mov­ing pro­fes­sional and bank­ing li­cences? Un­til we do that, we won’t be tack­ling tax avoid­ance and eva­sion.”

Since the be­gin­ning of the eco­nomic and fi­nan­cial cri­sis, MEPs have been fight­ing against un­fair tax prac­tices that starve coun­tries of much needed funds. Ex­am­ples of Par­lia­ment’s work are the EU’s anti-money laun­der­ing di­rec­tive and rules oblig­ing multi­na­tion­als to dis­close their tax in­for­ma­tion. In ad­di­tion MEPs adopted Par­lia­ment’s rec­om­men­da­tions for fight­ing ag­gres­sive cor­po­rate tax plan­ning at the end of 2015.

Tax rul­ing prac­tices by some EU coun­tries that seemed to favour large com­pa­nies were in­ves­ti­gated by two spe­cial com­mit­tees. Busi­nesses such as Google, Ap­ple, IKEA and Mc­Don­ald’s ap­peared at hear­ing or­gan­ised by these com­mit­tees to ex­plain their tax prac­tices. The fi­nal re­port of the sec­ond spe­cial com­mit­tee re­gard­ing tax rul­ings in­cluded rec­om­men­da­tions such as a tax havens blacklist and sanc­tions against non-co­op­er­a­tive tax ju­ris­dic­tions.

In the wake of the Panama pa­pers rev­e­la­tions Par­lia­ment set up an in­ves­tiga­tive com­mit­tee. MEPs will vote on its fi­nal re­port dur­ing the De­cem­ber ple­nary. One of the con­clu­sions of the re­port is that some EU coun­tries have failed to tackle money laun­der­ing and tax eva­sion.

One of the pri­or­i­ties for the Par­lia­ment is to cre­ate a level play­ing field for EU coun­tries and get rid of ques­tion­able tax schemes.

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