Jean-Claude Juncker was questioned about the fight against tax evasion by inquiry committee during a hearing at the Parliament on 30 May
European Commission President Jean-Claude Juncker took part in a tax hearing in the Parliament on 30 May, during which he stressed the Commission’s commitment to fighting tax avoidance in the EU as well as defended himself in relation to tax deals made when he was prime minister of Luxembourg. Revelations from the Panama papers and the Lux leaks scandal showed widespread tax avoidance practices in Luxembourg. Juncker was not only prime minister from 1995 to 2013, but also served as the country's finance minister from 1989 to 2009.
During the hearing German Greens/EFA member Sven Giegold told Juncker that although he was now working hard to tackle tax evasion, people still wanted a clear statement of responsibility on what he did in the past. “That is what is still damaging your credibility. I think this is a shame given that you a making positive progress on tax evasion right now,” Giegold said.
Juncker responded: “I understand that you would like to know more about the background, but please don’t measure my credibility on that basis. We should measure the credibility of this Commission on the basis of what it does now."
German S&D member Peter Simon said that the widespread impression in Europe was that Luxembourg “decided to get rich by having state-organised tax evasion”.
Some MEPs pressed Juncker on the reasons why Luxembourg appeared more frequently in the Panama Papers than other EU member states. Juncker replied: “You have to have in mind that these mentions of member states relate to the past. We were living in a totally different world from the one we are in now."
An end to tax avoidance?
Juncker said he believed that “tax justice is more essential than ever” following the revelations in the Panama papers. He insisted the Commission intended to put an end to unfair tax avoidance practices and would try to make taxation more transparent, fairer and effective.
The Commission President referred to some of the progress that had been made recently, including a deal on the automatic exchange of information on tax rulings, ending banking secrecy via a series of bilateral agreements and anti-tax evasion measures to unravel some of the most common schemes used by companies to avoid paying taxes.
“This is our direct response to the Panama Papers scandal,” Juncker said. “The scandals that have been revealed have made our task easier. This pressure should not let off.”
However, Czech ALDE member Petr Ježek said that one of the main findings of Parliament's inquiry committee would be that the implementation of EU law by member states was either neglected or insufficient.
When the German MEPs Bernd Lucke (ECR) and Peter Simon encouraged Juncker to publish a list of tax havens in Europe, he declined, saying the Commission had neither the resources nor the duty to name and shame.
About the inquiry committee
The Parliament decided to set up a special inquiry committee following the leak of the Panama papers in 2016, which revealed large-scale offshore money laundering, fraud and tax evasion by multinational companies and individuals through 11.5 million financial and legal records. The aim of the committee is set up to assess how the European Commission and EU countries are fighting money laundering and tax evasion.
It’s estimated that EU countries miss out on €160-190 billion in tax revenue per year due to corporate tax avoidance.