April 28, 2009
Monique Perry Danziger, +1 202 293 0740 ext. 222
Global Financial Integrity
Monique Perry Danziger, +1 202 293 0740 ext. 222
WASHINGTON, DC – Global Financial Integrity (GFI) applauds the European Commission’s release of recommendations for actions EU Member States should take to promote “good governance” in tax assessment and collection, such as increasing transparency. Released today, the Commission’s recommendations build on existing EU policy for good governance and the recent G20 conclusions concerning uncooperative tax jurisdictions.
“Tax fraud in Europe has escalated and is estimated to cost as much as $257 billion to $321 billion annually. That is equivalent to 2.5 percent of EU’s economy,” said GFI director Raymond Baker in response to the Commission’s announcement. “Developing countries are losing far more—as much as $1 trillion per year. Improving transparency, regulation and cooperation in international finance is crucial to combating tax haven abuses which enable these massive losses.”
GFI highlights the following Commission recommendations for EU Member Nations:
- Expand the scope of the Savings Tax Directives to intermediate tax-exempted structures such as trusts and foundations, and to income equivalent to interest obtained through investments in some innovative financial products.
- Discussion of counter-measures towards non cooperative jurisdictions in the tax area;
- Conclusion of specific agreements in the tax area containing, if appropriate, provisions on transparency and exchange of information for tax purposes at the EU level to accelerate the process of implementing commitments to greater transparency and exchange of information made by certain jurisdictions;
- EU Member States to adopt a coordinated and coherent approach in the promotion of good governance principles towards third countries, including, where appropriate, coordinated action against jurisdictions that refuse to apply good governance principles.
- More coherence between Member States’ individual bilateral tax policies towards third countries and the principles of good governance in the tax area.
The full recommendations may be viewed here.
“Recent events have underscored the importance of transparency and accountability in the international financial system,” said Baker. “The U.S. is also moving towards curtailing tax haven abuse and harmful banking secrecy, with legislation such as the Stop Tax Haven Abuse Act, which was endorsed by the President after its introduction in March, and language in the Executive Budget describing tax reform policies designed to generate $210 billion in revenue over the next 10 years.”