Green MEP, Molly Scott Cato, a member of the Special Committee on Tax in the European Parliament, will present a report to the plenary session in Strasbourg this week on closing loopholes that would result in loss of tax revenue. She will use speaking time in the plenary session later today to say:
“We are in a tax crisis. We see governments, not just of remote tropical islands, but within our very own Union agreeing bargain deals with multinational corporations. Our citizens pay the price for this, seeing their public services slashed and our SMEs losing out because they simply can’t compete with the tax arrangements that multinationals receive.”
This will be the first time Dr Scott Cato, who is also Green Party spokesperson on finance, has been rapporteur on legislation since she took office in May 2014. The legislation comes as part of the Commission’s Tax Transparency Package of March 2015 which proposes to repeal the 2003 Savings Tax Directive on the grounds it duplicates the provisions required by an alternative Directive on Administrative Cooperation in the field of taxation. The planned repeal aims to help Member States avoid the inconvenience of double systems of collecting and reporting of data.
However, Dr Scott Cato has warned that the repeal of the Savings Tax Directive risks opening up loopholes for tax avoidance and has explored in detail these potential loopholes, consulting both independent tax experts and Commission officials. She has suggested amendments which the Parliament will vote on this week. The amendments include one which notes that the Commission did not produce a cost-benefit analysis of not repealing the Savings Tax Directive; a call for a stronger role for the Commission in bilateral negotiations with overseas territories, such as Jersey and Guernsey; and a call for the Commission to report in 6 months on the potential loopholes that she has raised within her report. Molly Scott Cato will tell the Parliament:
“The LuxLeaks scandal a year ago showed that senior politicians, tax accountants and corporate bosses knew exactly what was going on in the cosy world they call tax rulings. But as a parliamentarian I knew nothing, and those I represent knew nothing. It is for this reason that the Greens will settle for nothing less than full publication of tax information. It is only when politicians know that their deals with corporations may become known to their electors that they will act in the interest of those electors. We also call for the Commission’s central directory of rulings to be made public not only for the Commission and other Member States, but for European citizens too.”