European Parliament leads calls to tackle tax dodging by multinationals and the super-rich

The European Parliament has been at the forefront of investigating tax scandals such as Lux Leaks and the Panama/Paradise Papers. It has set up special and inquiry committees to shed light on the on the dubious practices which help the super-rich and multinational companies to dodge their fair share of taxes.

Tax avoidance schemes diminish the funding of important services, the NHS and new infrastructure. The damage does not end there. Small and medium sized companies are at a competitive disadvantage just because they pay their taxes, while mega-corporations receive tax sweet heart deals for the authorities and can use elaborate schemes to avoid tax. All we are asking for is a playing field where everyone pays their fair share.

The European Commission, under pressure from Labour MEPs and their Socialist & Democrats colleagues from around Europe in the Parliament, has already brought forward important proposals that could make a huge difference. Unfortunately some member states in the Council, among them the UK’s Conservative Government, are trying to slow or water them down.

 

 

Last week EU Finance Minister’s finally agreed the EU’s blacklist of tax havens. This is an important step but meaningless if not accompanied by strong and deterrent sanctions. The Socialist and Democrat Group in the Parliament’s argued strongly and voted for sanctions and that Ministers in the Member States should enact them.

Tax avoidance is a global phenomenon and though it is impossible for one country to tackle it alone, there are still measures the UK could implement to make a difference; unfortunately the Conservatives in government are refusing to do so. Tax dodging thrives in the cracks between the laws different countries. When countries don’t cooperate individuals and corporations exploit legal loopholes.
Whatever the UK’s future relationship might be, the European Union will continue to lead the fight against tax avoidance - simply because it is the only thing big enough to do so. The UK should be part of that fight to deliver a tax system in which everyone can have trust. Unfortunately there is a danger that the UK itself tries to survive outside the EU by itself becoming a psudo-offshore economy where corporations are attracted by tax breaks and the super-rich can shelter from paying their fair share. That would be a poor basis for any productive relationship with the EU.

The report, I voted for today reiterates the European Parliament’s commitment on fair and just taxation. The Council, and especially the UK government, should follow suit.