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S&Ds deplore conservatives’ moves against tax justice


15 Jun 2023



Today, the European Parliament has adopted a report on the lessons learnt from the Pandora Papers scandal. The scandal broke, in October 2021, when an unprecedented leak of records from offshore services across the world revealed how intermediaries help affluent individuals to shield income and assets from fair taxation.

The Parliament’s report is an opportunity to increase the crackdown on tax abuse. However, the Socialists and Democrats deplore that fact that the conservative forces in this house have weakened this ambition. The Group condemns, in particular, the right wing’s blockage of a call for a minimum tax on capital gains at the European level.

Niels Fuglsang, S&D MEP and European Parliament rapporteur on lessons learnt from the Pandora Papers, said:

“We deplore the conservatives’ moves against tax justice. Considering the lack of progress in reforms since this, biggest ever, leak of offshore papers, this is absolutely disgraceful. The European People’s Party refuses to acknowledge the tax inequality that we witnessed with the Pandora Papers scandal.

“We proposed three main measures to fix a rigged system, in which the top 1% refuses to play by the rules and can pay little or no taxes.

"First, a call for a minimum tax on capital gains at the European level. This would reverse the trend of curbing the taxes of top earners and help prevent wealth shifting and tax avoidance behaviour across EU member states. But, the EPP has today blocked this call.

“Second, we need to change the way that auditors and advisers work today. They make this show go on, as we often see audit and advisory roles performed by the same company, which creates an obvious conflict of interest. Today, we have secured a call to separate audit departments from advisory ones, despite conservatives’ attempts to block this as well.

“Third, we need rules against shell companies. The Parliament requested these rules and was heard by the Commission, but now EU member states cannot find an agreement. We urge them to unblock this key file as soon as possible.”

Aurore Lalucq, MEP and S&D spokesperson on taxation, added:

“Today, we have two parallel systems in our society. There are regular people who pay taxes, and there are the superrich who think that our rules on taxes do not apply to them. It is unacceptable and unsustainable, but it can be changed.

“Tax regimes designed to attract high-net-worth individuals to invest or live in their territory are worrying and unfair, especially when you grant them generous tax benefits which do not apply to nationals. This widens social and economic inequalities. The European Commission should assess the impact of these tax regimes and take action.

“Moreover, the Pandora Papers prove once again that the fight against tax abuse will only ever succeed if we increase transparency. The complex ownership structures of the hidden financial system of tax avoiders, tax evaders and money-launderers prospers on secrecy. We need to know who really owns companies.

“We will also continue to push for better regulation and supervision of all the intermediaries – such as wealth managers, law firms, company formation agents and accountants – who design and enact these complex schemes to shield wealth and assets from scrutiny. The impunity cannot continue.

“Finally, we urge EU leaders to give teeth to the EU tax havens list, by including a minimum level of economic substance as criteria for what constitutes a tax haven, as well as tough sanctions."