Pandora Papers: Yet another revelation of large-scale tax avoidance shows need to double efforts for fair taxation

LuxLeaks (2014), Panama Papers (2016), Paradise Papers (2017), now the Pandora Papers: The seemingly infinite and continuous revelations of tax avoidance of the very rich show that the EU needs to double its fight for fair taxation.

As the International Consortium for Investigative Journalists (ICIJ) and its partners have revealed, by means of the Pandora Papers, yet another proof of large-scale tax avoidance by some of the richest and most privileged individuals around the world, it becomes apparent that the EU, too, needs to reinforce its efforts for fair taxation.

CESI Secretary General Klaus Heeger said: “As a trade union umbrella organisation, we have been calling for robust and effective measures to close loopholes not only for illegal tax evasion but also for highly immoral and unethical tax avoidance since the LuxLeaks scandal in 2014. While workers pay income taxes that are directly deduced from their salaries, and while many enterprises undoubteldy pay their taxes in a very honest way, there remain ways for rich and privileged capital owners to circumvent taxation. As we try to re-build Europe after the Covid crisis, as we need to invest in performing public services more than ever help our economies face challenges from a social climate change management to inclusive digitalisation, as we need financial resources to mitigate persisting socio-economic inequalities and hardship of the vulnerable members of our societies: We cannot afford that workers and honest companies finance this disproportionally while many of those who even made profits during the last crises shy away. We need more social fairness, and this requries fairer taxation.” He added: “During the last years, the public discourse about fair taxation has become more prominent in the EU, but cleary much needs to be done still. We finally need effective rules against shell entities and other dubious letterbox companies. We need a serious EU tax havens black list which includes repellent sanctions for non-transparent countries and which actually features all tax havens worldwide. We need an even better exchange of information between financial intelligence units and adequate personnel levels and well-trained staff in tax administrations. We need tax authorities that can better supervise financial intermediaries like law firms and accountancies and that can also tax income on capital abroad.” He concluded: “To advance on fair taxation in the EU, we urgently need a transition to qualified majority voting in the Council. As the Pandora Papers have shown, even politicians with actual power in the Council are involved in tax avoidance, such as Czech Prime Minister Andrej Babiš. It not credible to think that they have an interest to change rules, so tougher rules to crack down on tax avoidance are only possible if unanimous decision making is abolished and their power of veto is ousted. We need an honest and open discourse about this in the EU.”