Sinn Fein MEP Matt Carthy has welcomed the introduction of a tax haven blacklist by the European Commission, but has criticised the secrecy and criteria used in the selection of the list.
“Many of us campaigning for international tax justice have looked at this blacklisting exercise with scepticism, noting the potential for the process to be highly politicised and, as a result, ineffectual as a measure to tackle tax havens and push them to reform.
“Just 17 jurisdictions are on this list, while notorious tax havens such as Bermuda and the Cayman Islands are not included. The automatic exclusion of EU member states from the blacklist of tax havens makes the end result a joke, as some of the member states of the EU are complicit in a huge proportion of the profit-shifting that takes place globally.
“Last week Oxfam released a report in which it found that at least 35 states should be on a tax haven blacklist, including EU states Ireland, Luxembourg, the Netherlands and Malta. In a separate report, the Tax Justice Net also listed states Ireland, Luxembourg, the Netherlands and Malta, and added Britain and Cyprus as members of the EU that should be on the blacklist using the European Commission’s own criteria.
“In addition to the automatic exclusion of EU member states, political lobbying by countries like Britain resulted in its dependencies not being included – because they successfully removed the criteria that having no corporate taxation in place indicated a jurisdiction was a tax haven. So you can have a tax rate of zero, like Bermuda, and yet not be considered a tax haven according to this list.
“The process by which the jurisdictions were selected was highly politicised, but it was also highly secretive. Transparency International has been very critical of the process, saying it has been virtually impossible to get any information on how this list has been developed.
“The Commission and the Council needs to release the documents and minutes of meetings where the selection process took place and the negotiations that saw some jurisdictions removed from the list. The commitments given to the EU by the so-called grey list of countries who have pledged to implement change in order to avoid being blacklisted also needs to be made public.
“The concept of creating a tax haven blacklist with sanctions is a useful one that has the potential to encourage reform internationally, so I welcome the creation of this list as a first step.
“But let’s not fool ourselves that the Commission’s politicised and secretive blacklist will be an effective tool at ending the offshore scam – it won’t be. EU members must commit to global and public country-by-country reporting for multinationals and to fully public beneficial ownership registers as immediate and more effective tools for fighting tax fraud and financial secrecy.”