Fighting tax-avoidance in developing countries

The economic crisis has made most developed countries cut their development aid.

Trade liberalisation has lead to reduced revenue from tariffs. Tax havens and non-cooperative off-shore centres help tax evasion in developing conutries.

This increases the need for other sources of revenue for governments in developing countries, if they want to fulfil state tasks and meet their obligations under the Millenium Development Goals (MDGs).

By combating tax evasion of multinational companies and high net-value individuals, developing countries could stabilise their budgets and improve public infrastructure services.

The Greens promote policies against the discontents of trade liberalisation.

We want the EU to reconsider its sometimes counter-productive policy of ever decreasing trade tariffs. The EU should take the lead in combatting tax evasion demands.

No developing country alone can force the implementation of automatic information exchange between national tax authorities.

We demand country-by-country reporting, so that multinationals report profits where they are actually made, and not in tax-havens where taxation is lowest.

The Greens succeeded to make the Parliament agree on the negative effects of tax competition and tax exemptions granted to multinationals, as well as on the negative-side effect of trade liberalisation regarding the erosion of tax revenues for least-developed countries (LDCs).

We made the Parliament support the policy option of capital controls, whenever necessary.

We gathered support for initiatives on automatic information exchange between national tax authorities, that would include sanctions both for non-cooperative jurisdictions and for financial institutions that operate with them.

The Parliament demanded to go beyond the OECD framework against tax evasion and to encourage progressive taxation regimes in developing countries by giving priority on direct taxation over indirect taxation.

The Greens were not able to gather a majority behind a Financial Transaction Tax at European level.

At this time the conservative EPP opposed the decisive phrase. But several conservative politicians across Europe changed their minds later and supported this demand in other reports.

The EPP tried to weaken the text at several other occasions. They did not want to take concrete steps against tax-havens and the financial institutions using them.

Again, under the pressure of more recent evidence, they have changed their minds today and make tentative steps to combating tax evasion.