Cameron urges EU leaders to reach decision on tax evasion before G8

David Cameron Dec 2012.jpg

UK Prime minister David Cameron on Wednesday (24 April) called for his peers in the European Council to take decisive action on tax evasion before the G8 summit in June.

“Tax evasion and aggressive tax avoidance are global problems that require truly global solutions,” Cameron wrote in a letter to European Council President, Commission President José Manuel Barroso and the leaders of the other 26 member states.

In an EU summit on 22 May Cameron is expected to support the rapid adoption of a multilateral automatic information exchange system as a new global standard in order to push further the G8 agenda on tax evasion.

“Otherwise, tax evaders will simply play the system and arbitrage between one jurisdiction to another,” he said. The prime minister added that international efforts should focus on a concrete plan to increase transparency.

Cameron is also pushing for a reform of global tax rules through the G20 – a grouping of 20 of the world's major economies – and the Organisation for Economic Co-operation and Development, including on areas such as country-by-country reporting by companies on the taxes they pay in their countries of operation.

Cameron made reference to the recent steps taken to clamp down on tax evasion, notably the completion of automatic information exchange agreements with the UK's Crown dependencies – the Isle of Man, Guernsey and Jersey – and the announcement with France, Germany, Italy and Spain to pilot such data exchange.

The UK premier sees the G8 Summit in June, which unites leaders from the world's eight largest economies, as a timely opportunity for the G8 and the EU to inject the political will required to raise international efforts to a new level and take radical, rather than incremental, action.

Time to stop tax leakages, MEPs say

Meanwhile the European Parliament’s Committee on Economic and Monetary Affairs adopted on Wednesday a report on the fight against fraud, tax evasion and tax havens .

"Now is the time to take determined action against tax fraud, tax evasion and tax havens and end tax leakages from our societies," said the shadow rapporteur for the European People's Party (EPP) group, Sirpa Pietikäinen.

Leaks of offshore tax havens, together with a ministerial-level fiscal scandal in France, have created the political momentum needed for governments to take strong action, the MEP said.

Pietikäinen urged the Council to agree on the automatic exchange of information on savings as a matter of priority. “This is essential in trying to curb illicit and malevolent tax evasion and avoidance," she said. She called on member states to agree on a directive for a common consolidated corporate tax base.

Most political groups in the EU legislative echoed the EPP.

Liberals spokesperson on the subject Theodoros Skylakakis, a Greek MEP, said: "Tax havens are the hell for honest tax payers. Against this practice the report calls on the Commission to deliver a clear definition of tax havens and to create a public European blacklist of tax havens by December 31st, 2014.”

"Legitimate tax evasion and avoidance deprives exchequers in EU member states of €1 trillion in revenue per year, according to the EU Commission. The failure to address this problem in the context of the current economic crisis is scandalous, all the more so given the growing acceptance that the exclusive preoccupation with contracting public spending has exacerbated problems in crisis countries. Robust action on tax avoidance would counterbalance this,” said Dutch Green MEP Bas Eickhout.

At their March 2012 summit, EU heads of states asked the European Commission "to rapidly develop concrete ways to improve the fight against tax fraud and tax evasion, including in relation to third countries and to report by June 2012".

The Commission followed up on 27 June with a review of the measures currently in place, to see how they can be improved and intensified.

The aim is to create a stronger, more coordinated approach to tackling tax evasion, aggressive financial and tax jurisdictions, and unfair tax competition.

The European Commission last December has released a package of measures to tackle the estimated €1.3 trillion lost to tax evasion and fraud in Europe, against a background of alleged avoidance amongst major companies.

  • 22 May 2013: EU summit
  • 17-18 June 2013: Group of 8 Summit in Lough Erne (Northern Ireland)

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