One year after the Pandora Papers scandal – has the EU learned any lessons on tax havens?

On 3 October 2021, a gigantic journalistic effort by the ICIJ uncovered the biggest scandal on tax avoidance, the Pandora Papers. These revelations show how the richest and most powerful companies and billionaires are finding loopholes to hide and increase their wealth at the expense of society. The list revealed the names of world leaders, politicians, business owners, and oligarchs. They all seem to think that the tax rules don’t apply to them. The wealth of those representatives of the top 1% comes from the work and the lives of the other 99%.

One year after the Pandora Papers – what have we learnt from it?

One year after this unprecedented leak, some governments are still blocking some of the most important European laws. These laws would move the EU towards a fair and redistributive economy. Much like the billionaires in the Pandora Papers, it seems like these governments prefer to put their own interests and needs above those of society. Although the difference between them and millionaire entrepreneurs is that governments are responsible for the welfare of their citizens. This is why the governments in power have to put the citizen’s needs at the forefront of their decisions.

The cost-of-living crisis that is hitting the European Union hard would require radical fiscal decisions. The rise in energy prices has been generating super profits for the biggest companies for months. The richest continue to get richer while the rest of society struggles to pay ever-increasing bills. This is why we have been calling for a windfall tax on all sectors. But we need to start with the largest energy companies and redistributes these unfair profits back to the people.

At a time when Europe is seeing a cost-of-living crisis we need to act fast. But we still seem to be stuck in a limbo where there are no political decisions. The rich keep getting richer and people’s bill increase while they remain helpless and powerless

So what needs to change to ensure tax justice in Europe?

We really want to learn from the endless tax scandals that journalists worked so hard for to uncover. And there are a series of steps that the EU and its member states must take. It is time to stop delaying decisions that maintain a status quo where corporations are at the core of EU policies. The EU needs to make decisions for people – and not for profit. Sadly enough, tomorrow, Tuesday 4 October 2022, the Ministers of Finance will meet, but not discuss any of the much-needed tax reforms. A truly depressing Pandora Papers anniversary. As the Greens/EFA group in the European Parliament we call for them to once and for all commit to real tax justice. 

This is what we propose to fight tax injustice:
  • We need to stop these small updates of the European blacklist of tax havens. The Greens/EFA are calling for a comprehensive reform. The blacklist should include all states and entities where oligarchs, millionaires and large companies hide their funds.
  • The EU needs to ban shell companies, and it has to do it now. The super-rich must no longer be able to hide behind fake companies to avoid paying their fair share of taxes.
  • EU Member States must pass the directive on the minimum effective tax of multinationals immediately. The EU’s largest economies have signalled their readiness to tax the largest multinationals. As the profits of multinationals soar, other Member States should take the necessary steps to make this a reality across the EU. We must not succumb to individual blackmail.
  • The revision of the EU’s anti money laundering package is an opportunity to have strong rules to fight financial crimes. EU Member States should not water it down. They need to show that they are willing to do what it takes to fight financial crime. They have to guarantee that the EU economy is a fair playing field for all actors. It’s not a playground for those who don’t play by the rules.

If we manage to succeed in these measures, then and only then will we have learnt any lessons from the Pandora Papers. An EU that we can be proud of is an EU that does not surrender to the powers of billionaires and multinationals. It is one that ensures that the people and the planet are at the core of all its decisions, not profit.

What are shell companies and why are they facilitating tax avoidance?

A shell company is a legal entity that does only exist on paper but has no employees or physical offices. Shell companies are therefore “fake” businesses or company subsidiaries founded to move money from one individual and company to another without paying taxes.

The Pandora Papers once again revealed the misuse of these so-called shell companies to allow oligarchs and shareholders to avoid paying taxes.