MEPs propose real sanctions against those who facilitate tax avoidance and real protection for whistle blowers.

New steps in tax avoidance fight

https://api.multimedia.europarl.europa.eu/documents/20125/11592149/n003-0409-en.srt

Tax avoidance is estimated  to cost EU countries

up to 190 billion euros  in lost revenue every year.

In a recent poll, 75% of people surveyed  highlighted tax avoidance

as something they believed  the EU should be doing more to combat.

Parliament’s special TAXE Committee  is pushing for measures

designed to tackle tax avoiders  and those assisting them.

At the forefront is  Danish Socialist Jeppe Kofod.

One of the things we are fighting for is

for the banks and law firms  and accountancy firms

to be subject to real sanctions  if they engage in tax evasion

At the end of the day, it should be possible  for them to lose their operating license.

Also, better protection for whistle blowers.

Journalists but also employees that are  actually telling the public about these things,

about tax avoidance,  aggressive tax planning and so on.

They should be protected better.  We know there's a trial in Luxembourg,

that the LuxLeaks whistle blower  has been tried. I think it's a disgrace.

Plenty of steps are already  being taken globally, led by the OECD.

What is the EU and the Parliament  in particular adding to that process?

to fight base erosion and profit shifting  of big corporations.

It's important to implement it effectively  also in the European Single Market.

We need country-by-country reporting,  done publicly.

We also need,  when it comes to ownership issues,

so we can see who is behind  these shell companies, trusts and so on,

and whether they pay the taxes they should.

So we need to follow up on these types of  laws concretely in the European Union.

And also when we deal with third countries  that act as tax havens,

if they're not going to cooperate  to implement the OECD standards.

So the Parliament's special TAXE  Committee got a second incarnation.

we've seen the establishment of  a new committee of inquiry.

What will that inquiry committee  be able to achieve

It can legally request documents  from EU institutions, from Member States.

And the TAXE committee was a special  committee with a limited mandate.

So it will have a stronger,  more powerful mandate

and it will also look  at a broader field of issues:

tax avoidance, tax evasion,  but also money laundering.

Like we saw with Panama, there are  criminals, drug dealers or terrorists.

Corruption can be involved,  due to the secret structures in Panama.

So we can go much deeper and assess  if the actions and legislation in the EU

are sufficient to deal with these  problems with third countries.

I think not, so we need to strengthen that  and dig deeper into these issues.

How important is it for you as a politician  representing Europeans here in Parliament

to get this right, to perhaps restore  confidence in European institutions?

If our tax base is eroded by big-scale tax  evasion and avoidance, as we see today,

who should pay for schools,  hospitals and public goods?

And outside of the economic argument  that you have just put,

what about the confidence and faith  in the institutions?

Yes, very much so because many citizens  rightly feel that our institutions -

governments, EU institutions -  are failing to ensure tax justice.

This in an era of globalisation  where economy is global,

where capital flows freely around the world  to a greater degree

and where we also see inequality on the  rise globally and internally due to this.

They see that there is massive  tax avoidance at the same time.

It's about re-building trust in that  our institutions, our governments,

democratically elected people, can fight  back against this very negative trend.

And what about the reason why  tax avoidance is possible in the first place?

One of the reasons is tax competition  between Member States.

How would you seek to  redress that problem?

You could set your own tax rate,  tax structure in your Member State

but if the system you adopt in legislation

has a very negative impact  on your neighbour, a very bad tax regime,

then it is a problem for the single market  and tax justice.

So I think we should strengthen our  cooperation in the single market in the EU

with all 28 Member States  to avoid these very harmful tax regimes,

Patent Boxes and Knowledge Boxes,  to give one example,

where in reality you just help  big multinationals to evade taxes.

So I think that's the way to go  but I know it's a big challenge.