- ‘Panama Papers’ show the need for new legislation proposed by South East Labour MEP Anneliese Dodds to crack down on tax avoidance and evasion
- European Parliament voted to approve the proposals on Wednesday 16thDecember
- Proposals must be implemented by Commission in one year
Following the revelations contained in the ‘Panama Papers’, South East Labour MEP Anneliese Dodds has renewed her calls for stronger laws to crackdown on tax avoidance and evasion.
“The scale of the issue has been revealed by the papers from Mossack Fonseca. I’ve been calling for the EU Commission to act on this, and the need is now greater than ever. I was delighted that the report I authored was backed so overwhelmingly by the European Parliament in December.”
Anneliese was the co-author of a comprehensive legislative report which was supported by the European Parliament in December to strengthen recent efforts to clampdown on aggressive tax avoidance and evasion. The report made concrete recommendations that are currently being worked into legislative proposals by the European Commission.
The report had already been approved by the Parliament’s Economic and Monetary Affairs committee and is split into three sections: transparency, coordination and convergence; each with a series of recommendations.
One major highlight of the report is mandatory, public country-by-country reporting, meaning that all companies that operate across borders must publicly report on where they make their profits and where they pay their taxes. As part of efforts to bring more people forward as whistle-blowers – as happened in the lux leaks scandal – the report also introduces better protection for those who report misconduct or illegal activity to the authorities or the public.
Companies that try to use tax havens to hide their profits or shift their tax will also face tough new sanctions. A common definition of tax havens will be introduced across the EU and those firms that use them will be prevented from accessing any EU money, including Common Agricultural Policy funds.
Locally in Reading, people are directly affected by the schemes uncovered by the Panama Papers.
Anneliese explained: “Even here in Reading there are hundreds of properties that are registered in an overseas tax haven often used to hide wealth for tax purposes.
“Notable examples include a £6.4m property in the city centre registered in the British Virgin Islands, a £3.3m property registered in Antigua and Barbuda and a £179,000 property registered in the Seychelles.
“By introducing laws at EU level, we can prevent companies jumping across borders to reduce their tax bills to almost zero.
“Like the Lux Leaks scandal last year, the Panama papers show how much these corporations have been getting away with dodging tax that could have been used to build schools and hospitals in Reading or pay down the national debt.
“By offering greater protection for whistle-blowers and forcing companies to make public exactly how much profit they make and where they pay it, we can see tax justice begin in earnest.”