This week, the MEPs in the Committee of Inquiry of the European Parliament into Money Laundering, Tax avoidance and Tax Evasion (PANA) voted on the final details of the report and on the recommendations to Council and Commission before these will be submitted to go to vote in the plenum. The report once more emphasises the necessity of intensifying the cooperation in tax issues at European level. Only then will it be possible to sustainably drain the tax swamps in Europe.
The proposal of the report and the recommendations to Council and Commission had been submitted in the summer of this year. The two rapporteurs Jeppe Kofod (S&D) and Petr Ježek (ALDE) jointly prepared the content of these documents. The session this week focussed on voting on numerous amendment applications of the factions represented in the PANA Committee. The result is an ambitious step and shall bring home to EU Member States and EU institutions the necessity of such reforms.
A significant addition in the report is the explicit reference to those three EU countries, where, in the course of the revelations through the Panama Papers, most tax avoidance structures had been discovered: Luxembourg, the United Kingdom and Cyprus. These States should have known that because of this other Member States would lose significant amounts of tax money. The report also regrets the lack of uniform European standards and regulation on tax avoidance and tax evasion. This means that in individual countries such as Luxembourg, simple tax avoidance escapes prosecution. Apart from that, one of the amendments in the report concerns the inadequate exchange of information between EU States. This made it possible to hide enormous amounts of tax money from the tax authorities and to park them in European tax havens. Finally, an extended point in the report criticises the insufficient resources given to the relevant authorities in Member States and EU institutions. Without having adequate financial and human resources, supervisory authorities will not be able to effectively fulfil their responsibilities.
The amendments in the recommendations to Council and Commission result from the findings of the report. Hence, the “common EU list of non-cooperative tax jurisdictions and areas for tax purposes” shall be made more transparent and Parliament's involvement shall be increased. It is recommended to increase resources in the fight against tax evasion and tax avoidance and the liability of lawyers who design unfair tax tactics for companies and individuals. Once again, greater cooperation of the Member States in tax issues is called for.
Another important concern of the Committee is the decriminalisation and the improved protection of whistleblowers. Hence, the people responsible in case of Luxleaks have been prosecuted whilst the companies and individuals, whose wheelings and dealings had been exposed, remained largely untouched. Whistleblowing and investigative journalism can be very uncomfortable for money launderers and tax evaders.
A number of obstructions make the work of the PANA Committee extremely difficult on occasions. These include for example the refusal of company representatives and individuals to attend Parliament hearings or the holding back of some key documents by the Council.In this context, Sven Giegold, Member of the Greens in the European Parliament, pleads for a permanent committee into money laundering, tax avoidance and tax evasion.
Voting in the plenum of the Parliament on the report and on the recommendations will take place in December.