Numerous MEPs on Thursday told Commissioner for taxation Paolo Gentiloni that it was high time to tackle member state reticence to progress on tax justice.
Speaking during the first hearing of the newly created subcommittee on tax matters, MEPs taking the floor as the spokesperson for their respective groups highlighted the need to quickly translate the political messages from citizens and the proposals already tabled by the Commission into tangible instruments to fight ever-growing tax evasion and avoidance. Some others also pointed out that such progress would need to happen without creating a negative effect on the EU’s competitiveness or on the purchasing power of citizens.
You can watch the meeting again here.
Unacceptable practices and foot dragging
With the crisis we are in tax fraud and evasion is even less acceptable than ever before, Commissioner Gentiloni said in his opening statement. He underlined that up to EUR 140 billion EUR are lost each year to aggressive tax planning and the VAT gap has reached around EUR 180 billion per year.
MEPs urged the Commissioner to continue the work the previous Commission had left off at, calling on him to pay more attention to addressing the reticence of some of the member states which has led to a backlog of proposals in the Council. One MEP suggested that the subcommittee could help in pressuring member states by using the forum as “a space for constructive embarrassment of those who do not cooperate”, an idea openly supported by the Commissioner and some other MEPs.
Consumers’ purchasing power and the competitiveness of the EU’s companies would also need to be kept in mind when devising new taxes, some MEPs said. An MEP also said that care should be taken with the rollout of any new tax to not compound the negative economic effects from the COVID-19.
The subcommittee is expected to soon agree its work programme for the coming months. The next meeting is scheduled for 28 October.
The subcommittee on tax matters was given the green light by the plenary in June. It will be composed of 30 members and its mandate instructs it to deal primarily with the fight against tax fraud, tax evasion and tax avoidance, as well as financial transparency for taxation purposes. Before the establishment of the subcommittee, the EP had a number of special committees looking into specific aspects of tax evasion and avoidance, money laundering, and other financial crimes.