Time to crack on with implementation of proposed tax rules

EU Commissioner for taxation Paolo Gentiloni

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Numerous MEPs on Thursday told Commissioner for taxation Paolo Gentiloni that it was high time to tackle member state reticence to progress on tax justice.

Speaking during the first hearing of the newly created subcommittee on tax matters, MEPs taking the floor as the spokesperson for their respective groups highlighted the need to quickly translate the political messages from citizens and the proposals already tabled by the Commission into tangible instruments to fight ever-growing tax evasion and avoidance. Some others also pointed out that such progress would need to happen without creating a negative effect on the EU’s competitiveness or on the purchasing power of citizens.

Unacceptable practices and foot dragging

With the crisis we are in tax fraud and evasion is even less acceptable than ever before, Commissioner Gentiloni said in his opening statement. He underlined that up to €140 billion EUR are lost each year to aggressive tax planning and the VAT gap has reached around €180 billion per year.

MEPs urged the Commissioner to continue the work the previous Commission had left off at, calling on him to pay more attention to addressing the reticence of some of the member states which has led to a backlog of proposals in the Council. One MEP suggested that the subcommittee could help in pressuring member states by using the forum as “a space for constructive embarrassment of those who do not cooperate”, an idea openly supported by the Commissioner and some other MEPs.

Right balance

Consumers’ purchasing power and the competitiveness of the EU’s companies would also need to be kept in mind when devising new taxes, some MEPs said. An MEP also said that care should be taken with the rollout of any new tax to not compound the negative economic effects from the COVID-19.