April 5, 2016
At least 12 heads of state and government, numerous other politicians, as well as many stars in sports and entertainment: all have allegedly channelled billions of dollars of dodged taxes through one single firm in Panama to avoid tax. But this affair is just a snapshot of an ever-growing scandal of individuals and companies using tax havens to avoid paying their fair share of tax. A large coalition of NGOs and trade unions is calling on the European Commission to present ambitious proposals to up its fight against tax dodging.
By Aurore Chardonnet, Oxfam’s EU tax policy advisor
Just as LuxLeaks, SwissLeaks or OffshoreLeaks, PanamaPapers confirms once again how a well-organised tax-dodging industry makes wealth and profits disappear in tax havens. This is a problem for all of us, because it means states are lacking the resources for essential services like education and health. Already a problem for relatively rich countries in Europe, this is even more damaging for developing countries with more fragile economies.
Still waiting for an effective EU response to tax-dodging
One of the most important prerequisites for a successful fight against tax dodging is tax transparency. We have to ensure that companies disclose where they make their profits and where they pay their taxes. Next Tuesday, the Commission will table a proposal for such transparency rules known as public country-by-country reporting.
But a new leaked draft proposal does not provide the level of transparency needed to put a stop to tax avoidance. In the draft, companies are only required to detail their dealings in EU member states – firms would not need to report their business relations with companies in tax havens such as Panama. Also, developing countries will be left in the complete dark on big companies’ operations on their territories. Another severe deficit is the scope of the draft: only 10 to 15 percent of all multinational firms would actually be required to publish country-by-country reports.
Open letter to President Juncker
In an open letter published today, a network of civil society organisations is challenging the Commission to show ambition in the fight against tax havens. Oxfam, together with its partners, calls on President Jean-Claude Juncker, to move from intra-EU reporting, as suggested in the leaked draft proposal, to real public country-by-country reporting. Only by doing so will the proposal deliver real transparency on profits made and taxes paid by multinationals.Author : Oxfam International EU Advocacy