The Socialists and Democrats Group President Gianni Pittella said: "Every year billions of euros disappeared hidden in tax havens depriving people and governments of precious resources which could be invested in education, health care, public services and the fight against poverty".
"Almost every day a new skeleton is falling out of the Panama Papers closet. The revelations of the Luxleaks, Swissleaks and Panama Papers scandals have shed light on unacceptable practices, which challenged the EU tax system."
"The new inquiry committee will build on the work of the special tax committees set up 18 months ago but with a larger mandate. It will address issues such as money laundering and the impact on third countries," he said.
The Special Committee on tax rulings by Member States (TAXE) was set up in February 2015, following the LuxLeaks scandal to shed light on all Member States' tax rulings and examine ways to end unfair tax practices and combat tax evasion in the European Union.
'Scratching the Surface'
The Committee finished its work in November 2015 with a report saying that tax evasion was a "structural problem due to the lack of cooperation in tax matters among Member States", which many lawmakers saw as not going far enough.
Parliament installed a second Special Committee ("TAXE2") to look further into the Council's past activities when dealing with controversial tax practices and to monitor the implementation of Parliament's recommendations on how to tax companies.
Greens/European Free Alliance co-president Philippe Lamberts said: "Panama Leaks shows we have so far just been scratching at the surface of the odious tax avoidance practices employed by individuals and businesses around the world and Europe. The Panama Papers have shown that obligations under existing EU anti-money laundering legislation are not enforced by EU governments and authorities.
"It would appear that, as with the revelations in Luxembourg Leaks, EU institutions and governments have failed in their duty to enforce the law. With authorities and policy makers in Europe continuing to drag their heels in their response to the pre-existing evidence, it is clear that this void needs to be filled," he said.