MEP warns Brexit signals U-turn on tackling tax avoidance

Economist and MEP, Molly Scott Cato, is questioning whether the UK will tackle tax avoidance in the wake of Brexit. Dr Scott Cato says she welcomes moves by the European Commission this week to update EU rules on anti-money laundering, including strengthening existing legislation in response to the Panama Papers revelations. The European Parliament also voted overwhelmingly yesterday for a series of measures to make corporate taxation fairer and clearer, including an EU register of beneficial owners of companies, a tax havens blacklist and a common consolidated corporate tax base (CCCTB). However, the measures come just at a time when George Osborne has announced his intention to cut corporation tax. Dr Scott Cato is worried that a UK outside the EU may seek to avoid such rules and recommendations. Dr Scott Cato said:

“The Commission is grasping the nettle and proposing to make it harder for companies and individuals to launder money and evade tax by hiding profits offshore. However, given that the Panama Papers revealed the UK to be at the centre of the global network of tax havens facilitating tax avoidance, we have to consider whether there will be an appetite for cracking down on tax dodgers post-Brexit. I have always said, the best way to tackle an international problem like tax avoidance is at EU level. It seems inconceivable that a Tory government will take a stronger stand on this issue than the EU as a whole.”

Dr Scott Cato was recently appointment onto the European Parliament’s Panama papers committee of inquiry, a role she will continue in as long as the UK remains a member of the EU. She has called on chancellor George Osborne to give evidence to the inquiry. She said:

“This investigation needs to follow the money right to the top. The chancellor must be made accountable, particularly in light of hollow promises he has made on cracking down on tax avoidance. As long as I am an MEP I will work as closely as possible with my European partners to tackle tax avoidance.”