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    A view of the Arango Orillac Building where offices of the Mossack Fonseca law firm are located, in Panama City, Monday, April 4, 2016

    #PanamaPapers Gives Chance to Full Tax Transparency - Italian Lawmaker

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    The recent Panama leaks scandal gives more hopes of ensuring full tax transparency and finally put an end to the tax system which is kept in secret from the public, an Italian member of the European Parliament told Sputnik Monday.

    MOSCOW (Sputnik) — Following the Panama Papers revelations about business and politicians’ tax haven schemes involvement, the European Parliament set up last week a committee to investigate into the use of offshore accounts. Besides, major EU states announced a plan to share information on company ownership and offshores to avoid tax cheat.

    “Now, especially in the wake of these scandals, we have the best opportunity to finally put an end to this unfair and shameful tax system. The way to build a fair and sustainable tax system is by making information fully accessible to the public and the civil society, adopting a common approach on corporate taxation and making these practices illegal,” Marco Valli, representing the Five Star Movement, said.

    Valli stressed that the recent scandals about corporate taxation and tax havens only prove the European legislation in place is “clearly inadequate to address the problem of tax avoidance practices.” He explained that the state aid rules alone are insufficient and investigations take too long, especially because information is difficult to collect.

    “Even the reform proposals under discussion (tax-avoidance package, automatic exchange of information) fall short of EU citizens demands and expectations. They simply do not address the core of the problem: lack of real transparency, the legal status of these practices, the tolerance towards tax havens even inside the EU as well as the flawed and obsolete corporate tax laws,” Valli said.

    He said that to end the secrecy and bring full public tax transparency, it is necessary to adopt a real public country-by-country reporting on relevant information (paid taxes, employees, assets, subsidiaries etc.) regarding multinational companies for every country in the world where they conduct operations. Valli stressed this should not be “the bad copy of it just proposed by the Commission.”

    Another thing that could help improve transparency is to make information about tax rulings accessible to the public and not limited to exchanges between tax administrations, Valli said. He also pointed to introducing a more stringent transparency requirements on banks about transactions that may be exposed to the risk of tax evasion.

    “Last but not least, make these practices illegal. In the current system the problem of tax avoidance is confined to the moral dimension, as these practices – as long as they do not involve state aid rules – are perfectly legal, despite being so clearly against the common good. This is unacceptable,” Valli said.

    Political Will Needed to Reform Tax System Against Private Interests

    “Without political willingness to push for a radical and ambitious reform of the tax system against the private interests of big corporations and other tax evaders nothing will really change,” Marco Valli said.

    “This is what one the main battles of Five Stars Movement is about: putting pressure on EU institutions to act and deliver serious effective measures against on the biggest problem of our times,” Valli, who sits on the Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE 2), said.

    He also explained that there was never a real push to address the problem, and even though the EU leaders were forced to devote some attention to the matter, it was “unfortunately more in words than with actions.”

    “Despite the current public attention, the new tax legislation proposals, the increasing number of investigation procedures, the special tax committee set up in the Parliament (which lacks the inquiry powers that we have demanded since the beginning), the situation is still more of the same,” Valli said.

    On April 3, Germany’s Suddeutsche Zeitung published materials it claimed came from the Mossack Fonseca, a Panama-based firm that sells offshore companies, exposing alleged involvement of a number of world leaders and their circles in tax havens schemes.

    Mossack Fonseca responded to the leak by refusing to validate the information and accused reporters of gaining unauthorized access to its proprietary documents. It warned that using unlawfully-obtained data was a crime that it would not hesitate to punish by legal means.

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    Panama Papers, taxation, Five Star Movement, Marco Valli
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