|
|
EU governments may be missing out on 120 billion euros ($150 billion) by not collecting all of the corporate taxes they are owed, according to a new estimate today from Oxfam International. The group cited economist Gabriel Zucman’s estimate of 50 billion euro in revenue lost each year from wealth stored in tax havens, along with an Oxfam estimate of a 70 billion-euro gap between what countries receive and what they should be owed.
Tax issues have gained renewed prominence as Europe grapples with a prolonged economic slowdown and euro-area nations struggle to stay below budget thresholds. The Brussels-based commission warned last month that it could impose fines on France, Italy and Belgium unless they do more to cut deficits and make their economies more competitive.
‘Hire Collectors’
When the commission unveiled its work program this week, it pledged to drop a stalled energy-tax proposal and resume consultations on a common corporate consolidated tax base. The program also promises an “action plan on efforts to combat tax evasion and tax fraud, including a communication on a renewed approach for corporate taxation in the single market in the light of global developments.”
The EU’s tax policy plans run the risk of sidestepping the central issues, said Richard Murphy, director of U.K.-based Tax Research LLP, in a telephone interview.
“If you want to avoid austerity, it’s ever so simple. Hire tax collectors,” Murphy said, saying cutbacks in tax-agency staff have been counterproductive for the U.K. and other nations trimming their public workforces. He said countries also should put more effort into figuring out what the true gap is between potential taxes and actual revenues, and he called for more work on corporate taxation standards.
“Without trying to create a common consolidated tax base, is there a program of convergence that we can go on even if we never converge?” Murphy said. He said the goal should be to find realistic ways to align national approaches, not a common tax framework to parallel the euro as common currency.