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Last week, the European Parliament voted in favour of listing five EU countries as tax havens. Now, European Union governments and the European Commission must follow through to end tax havens, writes Oxfam’s tax expert, Johan Langerock.
The European Union is home to some of the world’s worst and largest tax havens.
For years, academia, politicians, Oxfam and others have been calling on the EU to clean up its house. But when EU finance ministers published an update of their tax haven blacklist and ‘grey list’ recently, once again EU member states were let off the hook.
Since the establishment of the tax haven blacklist in 2017, the EU has decided to only screen third countries in the blacklisting process.
In other words: European governments were not willing to hold themselves to the same standards by which they judge others. And until last week, no EU institution had dared to explicitly label EU countries as tax havens.
Taking a stand against tax dodging
This has now changed: last week, more than 300 parliamentarians from different political parties and countries took a stand and voted in favour of a resolution that recognises the Netherlands, Malta, Cyprus,
Ireland and Luxembourg as tax havens, referencing research conducted by Oxfam in our latest report “Off the Hook”. A historic breakthrough, and a very important step towards tax justice.
It is estimated that in 2015 alone, multinational companies shifted $600 billion (EUR 526 billion) in profits to tax havens, with a third of this going to tax havens in the EU.
This tax dodging deprives rich and poor countries alike of the money needed to invest in public services, such as healthcare and education.
Women and girls are worst affected since girls are the first to be left out of school when education fees rise, and women tend to fill the gaps in public services with hours of unpaid care to a greater extent than men.
Time for the Commission to take the next steps
Following the European Parliament vote, it is now up to the European Commission to implement concrete measures to tackle tax havens and aggressive tax practices inside the European Union.
Years of austerity and a faltering economic model have widened the gap between rich and poor in Europe, contributing to increasingly polarised societies and plunging the EU into crisis.
Ending the era of tax havens – including those on EU territory – is one key step in the creation of a world where all companies and individuals pay their fair share of tax, to the benefit of all people.
This entry posted on 9 April 2019, by Johan Langerock, Oxfam Policy Advisor for Tax and Inequality.