EU must adopt Panama inquiry proposals to fight tax avoidance, warn Labour MEPs following Paradise Papers leaks

As the European Parliament today debated the Paradise Papers leaks, Labour MEPs reiterated calls for the EU to lead global action against tax avoidance, and adopt parliament’s recommendations for a blacklist of tax havens and new laws against companies that facilitate tax avoidance.

Neena Gill MEP, Labour’s European Parliament spokesperson on taxation, said:

“Shocking levels of tax avoidance have been exposed in the world’s tax havens. This time we have some new names, but the same old techniques have been used. And we are even getting the same excuses.

“As we heard after the Panama papers: it is legal. And that is the problem. Tax avoidance may technically be legal, but it is highly immoral. Trillions of dollars are being siphoned off through loopholes to avoid tax, while public services are starved of money.

“And with an estimated $7 trillion (€6 billion) held in tax havens, tackling tax avoidance – and its criminal cousin, evasion – is central to reducing inequality. Inequality so unequal that just eight people in the world own as much wealth as half the planet.

“But we have a chance to stop it, through an international agreement that outlaws tax havens and imposes sanctions, fines and prison sentences on those that run them. As the European Parliament inquiry into the Panama Papers recommended, we need a comprehensive list of tax havens, and legislation splitting the audit sector into actual audit activities and tax avoidance facilitation.

“This is an ongoing problem: some of the transactions revealed by the leaks took place last year and many of these individuals continue to avoid and evade tax today. This problem can and must be dealt with.”

Neena Gill MEP added:

“MPs in Westminster are also today debating the Paradise Papers, and it is worth reflecting on the role of the Tory government in turning a blind eye to tax avoidance.

“Time and again the Tories domestically have done nothing, and at European level have sought to weaken, frustrate and outright block EU action to combat tax avoidance. Only last week, the UK government called on the rest of the EU to water down the sanctions that tax havens outside the bloc would face if they ended up on a planned blacklist.

“It is high time that we in Britain ask why we let Crown Dependencies – like Jersey, the Isle of Man and Guernsey – continue to be enablers of international tax avoidance.”