Tax evasion is no minor offence. Given that this has been the most high-profile case of tax evasion in German history means the punishment needs to fit the crime. For taxpayers, the three and a half year sentence is entirely justified. The longest sending-off in football history is a painful, yet valuable lesson for Uli Hoeness and society. You need to play by the rules.
What would have happened had there been no jail sentence? If Uli Hoeness had managed to escape the German courts without a scratch having had evaded taxes of over 27 million euros, the everyday taxpayer would have lost faith completely. Why should they continue to pay taxes in line with the law if those sitting on millions were able to do so via tax evasion?
The impact of the Hoeness case has been felt quite dramatically in Germany, with just under 30,000 German tax evaders signing up for the so-called ‘voluntary disclosure’ since the story has captured headlines. Let’s hope this trend continues.
Currently in Europe, all countries are experiencing austerity measures, fiscal austerity measures. These effects are passed down to taxpayers, who find their own household budget cuts, having less and less to spend. Moreover, some households are experiencing substantially higher taxes.
When some in society do not pay their taxes, this creates a vicious circle. With insufficient funds in the State’s purse, revenue needs to come from somewhere. Too often it comes from the wrong place: the ordinary taxpayer. This vicious circle harms society.
Paying taxes is the prerequisite for the good functioning of society. We need to pay taxes to allow the state to provide services, whether they are social or not, acting as the frame for democracy, justice and the rule of law.
We need to put the accelerator on the fight against tax evasion and promote more equality and tax fairness and tax justice. We do not just want to win the battle, like in the case of Uli Hoeness, but we need to win the war too, in order to eradicate this problem once and for all. To do this properly, it is important tax administrations all over Europe should have sufficient staff.
We need to see this as an investment and not as a cost. It is figures like Uli Hoeness that are a cost on society. If we invest in jobs in tax administration, we are investing in citizens and in society.
Romain Wolff is President of CESI and Secretary General of the Confédération Générale de la Fonction Publique