Molly has lambasted the European Parliament over its failure to adopt Green amendments to a motion on tax which could have helped promote a ‘more sustainable and just Europe’. Speaking to MEPs during a debate on the Annual Tax Report in today’s plenary session, she told MEPs:

“I was deeply disappointed that, in this year that will culminate in the Paris negotiations on climate change, our most important amendments calling for ecological taxation, the ending of tax advantages and exemptions granted to the aviation industry, and the phasing out of other fossil fuel subsidies were rejected. We should remember that tax, when used strategically, can provide incentives to move our communities towards the sort of future we imagine for our children, a future of sustainability as well as justice.”

Molly Scott Cato is a member of the Economics Committee in the European Parliament and has special responsibility for tax affairs. While disappointed with the package of measures to tackle tax competition announced by the Commission last week, she welcomed the commitment by Commissioner Moscovici, responsible for Economic and Financial Affairs, to addressing tax competition and avoidance. She has also welcomed the establishment of the special committee to investigate tax affairs across the union [link].

Speech in full to European Parliament during Annual Tax Report debate

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To the surprise of many, tax has become an issue of great interest during the past year. As corporations and wealthy individuals have found ever more intricate ways to avoid paying their fair share, taxation has been divorced from economic activity and as a result public coffers have been starved of revenue and governments have been unable to invest in necessary infrastructure or provide support for their needy citizens. We have reached the stage where it is vital for the protection of our civilised societies that we address the issue of tax avoidance and aggressive tax planning.

Tax avoidance is also undermining the single market. Transnational corporations are able to cut sweetheart deals with governments and to organise transfer pricing deals that could never be possible for the small businesses that are the backbone of our local communities across the European Union. In our role as the voice of small business and strong local economies, Greens demand that completing the single market includes the requirement for fair taxation across the Union, to ensure fair competition between small businesses and multinationals.      

In November last year, after the emergence into the public domain of the scandalous tax deals that had been agreed by President Juncker while leader of Luxembourg, there was a motion for the removal of the whole Commission. However, in spite of deep concerns about certain Commissioners, our Green position was that they should be given a chance to solve problems before being dismissed. We challenged Juncker to ‘act or go’.

Last week we saw the Commission’s proposed action and it won’t surprise you to know that we were deeply disappointed. The proposal on information exchange between member states is necessary and welcome, clarifying an obligation which has existed since the 1970s but not been properly applied. If it had been applied, it would have ensured that scandalous ‘tax rulings’ could not have been kept concealed. However, this is only one of a number of measures that could and should be introduced to improve transparency on taxation.

So I am pleased to welcome the many strong statements focused on addressing the issue of tax competition and tax avoidance included in this year’s annual tax report, especially the repeated call for a compulsory common consolidated tax base. I also welcome the establishment of the special committee to investigate tax affairs across the union.

However, as a Green I was deeply disappointed that, in this year that will culminate in the Paris negotiations on climate change, our most important amendments calling for ecological taxation, the ending of tax advantages and exemptions granted to the aviation industry, and the phasing out of other fossil fuel subsidies were rejected. We should remember that tax, when used strategically, can provide incentives to move our communities towards the sort of future we imagine for our children, a future of sustainability as well as justice.

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