One year after the Panama Papers, tax evasion in Europe is still a pressing issue

One year ago, on 3 April 2016, the Panama Papers scandal broke, the biggest leak ever to fall into journalists’ hands. Documentation about 214,000 offshore companies and their owners was made public at the initiative of the International Consortium of Investigative Journalists (ICIJ).

Behind these opaque structures and the plethora of companies set up in numerous tax havens lies an intolerable truth: throughout the world, there are countless privileged rich individuals and enterprises who, with the assistance of big banks and consultants, hide their money from view. And in doing so, avoid paying tax.

It created a global shockwave, and global awareness: never before had a financial scandal caused such a stir in so many countries around the world, never before had the industrial scale of dirty money been exposed so clearly and in such detail. From the vast demonstrations in Iceland to the parliamentary debates that ensued in many countries, citizens mobilised to demand answers from their governments.

One year on, however, we can’t help but notice that the response hasn’t lived up to the scandal: European states seem reluctant to put an end to shell companies while the banks, the central players in the creation of these shadowy structures, have scarcely been troubled.

Minimal progress has been made in tackling corporate tax evasion, while the revelations of major groups practising tax evasion on an industrial scale are multiplying. In parallel, the taxation race-to-the-bottom continues to accelerate: while states announce more and more tax reductions for companies, new tax loopholes designed to attract enterprises to their territory are constantly being created.

Every state that takes part in this fiscal war is therefore choosing to forego crucial tax income, while at the same time increasing the tax burden on the least well off and the least mobile.

Every year, states agree to cut part of the tax income that is so badly needed to finance quality public services and to respond to urgent social and environmental needs.

There are several solutions: put an end to shell companies and the trust companies that facilitate tax fraud; fight against the big groups’ tax evasion by imposing transparency on their activities and on the tax they pay; put an end to the taxation race-to-the-bottom by promoting a floor on company tax at the European level and by reducing the number of tax loopholes and exemptions; put an end to tax impunity by strengthening the human resources in the administrative departments involved in hunting down financial criminals and by a thorough reorganisation of the fight against tax fraud and tax evasion.

Combating tax fraud and tax evasion is about social justice. It must be done to make it possible to finance national and international needs – social and environmental – and solidarity, and to strengthen consent to taxation, which has been brought low by tax injustice.

This story has been translated from French.