Juncker ‘Regrets’ EU Tax Haven Deals that Suck Money from Developing World

Written by | Thursday, November 13th, 2014
@Eubulletin

Jean-Claude Juncker, the new European Commission President, has presented a fresh proposal on EU tax transparency, thus responding to “Luxembourg Leaks” in which reporters published 343 “tax rulings” or “comfort letters” from the Luxembourg government to major corporations helping them to minimize payments and essentially depriving other EU countries of tax revenues. These latest revelations have prompted many to question Juncker’s role in creating the tax avoidance regime while serving as Luxembourg’s Prime Minister. In response to these allegations, Mr Juncker told press in Brussels yesterday (12 November) that “If the tax rulings, which were legal, led to a situation of non-taxation, I regret it,” while admitting that he was “politically responsible” for tax policy, though claiming that the country’s tax authorities acted independently of the government.

Meanwhile, both these legal structures behind tax havens in EU member states as well as multinational corporations have been accused of preventing and economic advancement of developing nations and also of perpetuating a cycle of poverty. Charles Abugre, the Africa regional director for the United Nations Millennium Campaign, has argued in an interview for Euobserver that “The very concept of a jurisdiction selling secrecy as its competitive advantage is killing democracy [which] not only does it undermine wealthy countries, it totally destroys democracy because the essence of democracy and democratic accountability is transparency.” To address this controversial issue, EU lawmakers met in a closed-door meeting on Monday (10 Monday) to try – unsuccessfully – to reach a consensus on “beneficial ownership” in the draft EU anti-money laundering directive. The so-called “beneficial ownership” makes legally mandatory full disclosure of the people behind legal entities like anonymous companies and trusts that are often accused of being set up by criminals with the intention to hide their true identities. The schemes like anonymous companies and trusts have been increasingly criticized by pro-transparency experts and MEPs who want to prompt member states to reveal the true identities of people behind the corporations and make the data available via a public register.

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