We must act now to clean up the mess we have seen in the Panama Papers and stand up for our citizens, say S&Ds

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We must act now to clean up the mess we have seen in the Panama Papers and stand up for our citizens, say S&Ds

S&D - Socialists and Democrats

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Date

13 Dec 2017

Links

Press release on S&D website

Sections

Euro & Finance

Strasbourg, 13 December 2017

After 18 months of investigation, hearings and fact-finding missions on the Panama Papers, the European Parliament today has presented over 200 strong concrete recommendations to fight international tax avoidance, tax fraud and money laundering. They include many progressive proposals such as to abandon the unanimity rule decisions in tax matters and the introduction of sanctions for those dealing with tax havens. The Socialists and Democrats regret however that their proposals to draw up a list of EU tax havens in the EU similar to the list approved by the EU finance ministers for third countries, and to introduce a minimum effective corporate tax rate, did not go through due to the opposition of right wing MEPs.

S&D Group vice-president and co-author of the Panama Papers’ inquiry committee report, Jeppe Kofod said:

“The Panama Papers revealed that a global corrupted elite of politicians, celebrities and big businesses can put themselves above any tax laws. A lot of these people have used tax advisers to avoid paying tax, hide money or to partake in money laundering and other criminal activities.

“This is fundamentally detrimental to our democracy and to the trust of the people. We need to act on behalf of our citizens to clean up the mess that we have seen with the Panama Papers. Our conclusions are clear. The EU legislation on anti-money laundering has not been properly implemented by member states, or enforced by the European Commission. Moreover, The EU is caught in a sick race to the bottom on taxation and lack of implementation of our own EU legislation.

“We need to see more tax transparency and end secrecy and tax havens. The Council of finance ministers must open up their closed and secretive working groups. They should be held accountable for their actions - and lack thereof - to the people. Countries blocking tax progress must be named and shamed. Tax advisers must face real sanctions if engaged in illegal activities.
“Now is the time to act. We want an end to the tax race to the bottom in the EU. This Parliament is however split on the means to achieve progress in tax policy. For instance, the proposal to introduce a minimum effective corporate tax rate was lost as a result of a very tight vote.”

S&D Group spokesperson on the Panama Papers inquiry committee, Peter Simon MEP, added:

“Our work shows that the list of shortcomings is long and includes issues such as the insufficient co-operation between EU member states, chronic underfunding and the lack of human resources of the supervisory authorities, as well as deficient implementation and application of laws and sanctions. These shortcomings have to be eliminated as soon as possible.

“The final report is only a snapshot of today’s situation and new cases and developments in money laundering, tax evasion and tax avoidance are constantly arising. These cases should also be properly investigated. Therefore, we welcome that the other groups also share our call for a special committee on the Paradise Papers and, in the long run, for a permanent structure which would allow for continuing investigations and keeping up the pressure on member states.”

Main S&D recommendations:

public country-by-country reporting (CBCR) as transparency is a key element to fight tax avoidance and ensure responsibility and accountability from multinational companies
a full Common Corporate Consolidated Tax Base (CCCTB) to ensure that profits are taxed where the economic value is created
to end the unanimity principle, which blocked many tax reforms in the EU and the use of ordinary legislative procedure via the utilisation of Article 116 (Lisbon Treaty) or clause passerelle
an EU list of tax havens with strong and deterrent sanctions
a reform of the Code of Conduct Group to ensure transparency and efficient scrutiny of EU MSs tax policies
stronger regulation of intermediaries, including the withdrawal of business licences if a company or a law firm is proved to be involved in tax evasion, tax avoidance or money laundering
protection of whistle-blowers and investigative journalists
public registers of beneficial owners
stronger anti-tax avoidance rules - including a switch over clause
strengthened international co-operation via a global summit and a UN tax body
a swift implementation of the common VAT system since 50 billion euros are lost each year in taxes due to cross border fraud