MEU opens the debate on tax havens

Third journey of Model European Union conferences in Universidad Carlos III de Madrid held the debate on tax havens and tax evasion, followed by a debate on The Financial Transaction Tax Directive.

IRENE VILLORA ESTEVE | MADRID

Model European Union conference on tax havens and tax evasion was held in Carlos III University of Madrid the morning of March the 12th as a preamble for a latter debate on the Financial Transaction Tax Directive.  The conference, developed by Ricardo García Zaldívar, President of ATTAC Spain along with Carlos Ruiz Escudero, President of ATTAC Madrid, set the contextual framework of current state on tax havens and tax evasion as well as the effects of such in the real economy and in society. A clear position against tax havens was embraced by both speakers, whose organization proclaims as an independent movement for the economic global justice. In words of Ricardo García Zaldívar “For ATTAC tax havens are the oil of capitalist motor”.

In the year 2000 The Organization for Economic Co-operation and Development (OECD) identified 35 countries as tax havens, number that doubles today although some of those remain camouflaged. Only in Spain tax evasion is estimated in 80 billion euros, of which 20.000 are found in tax havens. “Tax havens have harmful effects in the real economy and society”; “There has been an increase in financial crime and corruption as a consequence of tax evasion, especially in the poorest countries” Mr. García stated. But have any measures been taken about it whatsoever? Turns out tax evasion and tax havens have been slightly covered topics during important summits such as G20. The Unites States seem to be the exception to the rule, however. Developed in 2010 The Foreign Account Tax Compliance Act requires any individual to report its financial accounts outside the US, this measure, created as a means to fight offshore tax evasion has been embraced by several countries such as Germany, UK and Spain; which has not enforced it yet.

A set of six measures such as the end of bank secrecy, the strengthening of the technical human and financial resources of the Spanish tax authorities and requiring the identity of customers owning offshore bank accounts, was proposed by Mr. García and Mr. Ruiz as a possible solution to the issue; nevertheless they did not hesitate to launch the question whether eradicating tax havens constituted a utopia.

A special mention must be made to the last topic of the conference that covered European Union’s Financial Transaction Tax Directive, a measure crated as a means of further control in financial transaction operations to offshore tax havens. “The main reason to apply the measure was to get some money to be spent on social needs and to punish corruption cases and tax evasion” Ricardo García stated. No enforcement of this Directive has occurred notwithstanding, for some member countries such as the UK have denied it.

 

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