A taxing problem: the cost of failing to act on fiscal evasion 

 
 

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From closing banks abetting tax evasion to compiling a blacklist of tax havens, the EP means business when it comes to tackling tax fraud. MEPs have called on member states to step up their fight against tax evasion. We discussed the benefits and challenges of action with Ildikó Gáll-Pelcz and Mojca Kleva Kekuš, who each wrote a report on the strategy to follow.

The cost of tax evasion


Tax evasion cost EU member states €1 trillion in lost revenues a year or €2,000 for every European. This is more than these countries spend on healthcare and more than four times what they spend on education. "I call on member states to take the measures needed to at least halve the tax gap by 2020," said Ms Gáll-Pelcz, a Hungarian member of the EPP group.


Ms Gáll-Pelcz's report on taxes and growth was adopted in plenary on 21 May. In the report she warns that structural reforms and fiscal discipline are inevitable, but priority should be given to taxes levied on capital, environmentally harmful activities and some types of consumption rather than a levy on labour.


Ildikó Gáll-Pelcz (top) and Mojca Kleva Kekuš 

Time for action


Ms Kleva Kekuš says in her report, which was also adopted in plenary on 21 May, that authorities should suspend or revoke the banking licenses of financial institutions that assist in tax fraud by offering products or services to customers enabling them to evade taxes.


"EU leaders need to show that they are capable of defending the people against a small lobby group of banks, lawyers and rich clients," explained Kleva Kekuš, who is a Slovenian member of the S&D group.


The economic and monetary affairs committee is holding a hearing on tax evasion on 28 May at 15.30 CET. You can follow it by clicking on the link on the right.