EU clampdown on tax avoidance to release hidden billions to fight poverty
International development agency Oxfam and the European Network on Debt and Development (Eurodad) welcome the European Commission’s initiative to step up action against tax fraud and tax evasion, which cost billions in tax revenues in Europe but also in developing countries.
Oxfam and Eurodad are calling on Member States to follow the lead of the European Commission and agree on a common set of measures to counter harmful tax practices, such as corporate trade mispricing, which results in lost tax revenues and ultimately reduced essential services at the expense of the poorest. It is particularly important that they adopt a tougher definition of tax havens in order to minimise their impact and step up efforts to increase the automatic exchange of information.
Catherine Olier, Oxfam’s EU policy adviser, said:
“Coordinated action is the only way to clamp down on capital flight associated with tax avoidance. If the EU adopts a unified stance in tackling tax dodging, it will not only balance the books but also release the finance many developing countries and European governments desperately need to pay for essential public services, like health and education. In developing countries alone, tax avoidance costs €123 billion per year. These hidden billions should be spent building schools and hospitals.”
Javier Pereira, Policy Officer at Eurodad, said:
“By promoting the automatic exchange of tax information between countries, Member States will close some of the main tax loopholes in existing regulations and provide for greater transparency of capital flows.
“To efficiently crack down on tax avoidance, the EU should hold companies accountable for their tax practices, ensuring that they pay the right amount in the countries in which they work. It is only fair that multinational companies, like Starbucks and Google, pay their share of state spending in line with their real economic activity.”
Notes to Editors
- The proposed Action Plan presented today by the European Commission will now need to be approved by Europe’s finance ministers.
- Developing countries lose out on an estimated $160 billion (€123 billion) each year as a result of trade-related tax dodging, according to Christian Aid. This represents almost twice the amount developing countries receive in international aid.
- Tax avoidance vs tax evasion : Tax avoidance is usually considered as using complex techniques to exploit legal loopholes in order to pay less tax than is due, while tax evasion (also known as tax fraud) consists of using illegal methods to pay less tax.
- Corporate trade mispricing: Transfer mispricing happens when a subsidiary in one country charges a vastly reduced rate for goods or services to another subsidiary based elsewhere to minimise their tax liability. It is the largest component of illicit financial flows globally, representing around 65 per cent of the total.
Read the Eurpoean Commission's press release: Clamping down on tax evasion and avoidance: Commission presents the way forward
Gaëlle Bausson on + 32 (0) 473 562 260 or email@example.com
European Union Office reports and papers
So what did @G8 leaders deliver for the 1 in 8 people going to bed hungry each night? Here's our reaction: http://t.co/Ki8ZNWtSuy9 hours 8 min ago
RT @DFID_UK: David Cameron announces additional £175m for #Syria crisis to provide immediate humanitarian assistance http://t.co/dfDvdX2IDb…10 hours 6 min ago
11 hours 9 min ago
Poor people will be left behind in the race for #tax reform unless the #G8 seriously ups its game http://t.co/eddj3Qfeq4 #taxhavens11 hours 34 min ago
#G8 has asked all the right questions but has been thin on answers http://t.co/ACRH7YyBpV #landgrabs #taxhavens #SyriaPeaceTalks11 hours 59 min ago
Just hrs before the #G8 ends. Lend your voice before its over: demand that leaders close #TaxHavens, #StopLandGrabs & bring peace to #Syria.12 hours 49 min ago
#G8 on land: 'transactions should be transparent, respecting the property rights of local communities.' http://t.co/naak6xQBto12 hours 59 min ago
13 hours 36 min ago
PIC: @G8 leaders take to the golf course. Will they score a hole in one & end hunger on their last day together? #G8 http://t.co/HYUrK0bAHe14 hours 27 min ago
15 hours 8 min ago
RT @TomvanderLee: Geneva conference on #Syria more likely to take place in August than July, sources say to @Reuters15 hours 20 min ago
RT @oxfamgbpress: Listen NOW: @ShelaghFogarty live with @Oxfam from #Zaatari refugee camp in Jordan http://t.co/awmgroaiZZ on @bbc5live #Sy…15 hours 27 min ago
15 hours 31 min ago
With just 90 mins to talk #tax, the #G8 are teeing up for tax & land @G8 http://t.co/7x523hXZcf @EmmaSeery on #3Ts #transparency16 hours 33 min ago
Dear @G8: 1.2 bn people are living in extreme poverty. Act now to redress this inequality & ensure everyone has enough to eat! #G817 hours 13 min ago