By Julien Desiderio, Tax Justice Advocacy Officer at Oxfam-Solidarity
Lhe past week was rich in terms of fiscal injustice. Between the industrialization on a global scale of tax evasion which surprised no one, the culpable inaction of complicit political decision-makers and a reform of the taxation of multinationals which is taking water from all sides, we are in good stead. the era of organized financial crime. And in this world, we pamper our tax assistants.
Nothing new under the Seychelles sun. The Pandora Papers, revealed by the press and not by the tax authorities, remind us of what we already knew: wealthy individuals and multinationals use tax havens to avoid paying their fair share of tax. They secede from national solidarity to let the weight of the latter weigh on the rest of the community which diligently pays taxes. In doing so, these tax assistants participate in a system that feeds crime and corruption.
With each revelation of this type of scandal, we are promised to fight against tax evasion. And for good reason, this deprives Belgium of nearly 30 billion euros each year. These substantial resources should be invested in quality education, in accessible health care, in efficient infrastructures for the benefit of all citizens as well as in action against climate change at the national and international level.
Heads of state, more than 300 political decision-makers, who are supposed to act against these practices are in fact blithely feeding the system. In Lebanon, for example, the country’s oligarchy is the world champion in the number of offshore company creation while the country is on the verge of bankruptcy and the Lebanese people are suffering an unprecedented economic and social crisis.
A well-washed blacklist of tax havens
But that’s not all. Coincidentally, European finance ministers met the day after the Pandora Papers leaked to update the blacklist of EU tax havens. This list, quite empty, could be the banner of the lack of ambition of our decision-makers in the fight against tax evasion.
Indeed, it only has one of the 17 tax havens where EU banks operate. Worse, with the removal of Anguilla from its blacklist, the EU currently no longer lists any country among the 12 countries in the world with a tax rate of 0%. The blacklist does not include a single one of the 15 tax havens identified in 2016 by Oxfam, including countries that are at the heart of the Union! But if, as the European Commission itself asserts, this list is really meant to be ” objective, efficient and credible », The fact that several Member States which are notorious tax havens (such as Ireland, Luxembourg and the Netherlands) are not included in it considerably harms European credibility in the fight against tax evasion. However, it would be simple to create a real blacklist of tax havens by automatically placing all countries with zero or almost zero taxation and by evaluating the absence of economic activity of companies in a country.
A maximum tax rate for multinationals
On the other hand, just before the summer we were sold a supposedly historic agreement on the taxation of multinationals. While we are witnessing the largest increase in extreme poverty in decades, the OECD’s two-pillar framework will nevertheless increase global inequalities and deprive low-income countries of much-needed funds that could put them on. the road to a more equitable recovery.
The key to income distribution (two-thirds of revenue will go to rich countries), the rejection of several proposals made by the G24 and the African Tax Administration Forum (Ataf), the difficulties encountered by the less rich countries to participate effectively in the negotiations and the intimidation they suffered from their European counterparts in order to push them to approve the OECD agreement left a bitter taste and highlighted a North-South divide on tax issues .
In addition, everything suggests that, to please Ireland, the minimum tax rate will be permanently set at 15% without the possibility of reassessing it. With this reduced rate, embellished with a multitude of exceptions (supported by Belgium) allowing multinationals to lower their effective rate below 15%, the race to the lowest tax bid will intensify. The minimum rate will ironically become the maximum corporate tax rate.
Instead of indignation, however, the time for action and voluntarism must come. Today, international initiatives would make it possible to obtain more tax justice. They are there, in front of us. Not to embark on this path ambitiously is to be complicit in an unbearable fiscal assistantship which places on the most vulnerable the disproportionate weight of the greed of the richest.