MEPs demand stepped up fight against tax evasion by European council, member states

Members of the European Parliament this morning bemoaned the continued practice of tax avoidance and evasion in European member states, despite claims that government’s were working to clamp down on such practices.

Both member states’ finance ministers, as well as the council itself, came under fire on Tuesday for their lackluster performance in fighting tax evasion and avoidance.

The criticism was made during an urgent debate prompted by the latest Paradise Papers leaks. Finance ministers should not hide behind unanimity rules in the battle against tax avoidance, said MEPs, who also censured the Council for “not stepping up to the mark”. Currently, tax decisions taken at EU level must be agreed by all member states, with the several member states, including Malta, strongly opposed to any form of tax harmonization.

MEPs from across the political spectrum lamented the sharp practices used by the super-rich and multinationals to hide their wealth, as revealed in successive leaks including Luxleaks, the Panama Papers, and most recently, the Paradise Papers. The names of the individuals involved may change, but the mechanisms remain the same, added one MEP.

Kicking off the debate, Pierre Moscovici, the Commissioner for Economic and Financial Affairs, Taxation and Customs, said that the European Commission is close to finalising a list of “non-cooperative tax jurisdictions”, or tax havens.  This blacklist should be available after the 5 December meeting of Economic and Financial Affairs Council, he added.  

Replying to MEPs at the close of the debate, Mr Moscovici warned the EU must make progress in tackling this “fundamental problem” in tax matters.  Otherwise, come the next European elections in 2019, “we will all lose and it will be the populists, and the cynics and allies of those tax avoiders and evaders who will be elected.”