The reality is that we live in a globalised trading system that obeys neo liberal rules. There have always been supraregional corporations from Roman times at least. Today, multinational companies straddle the world and have to maximise profits and resources if they are to survive.
This reality is superimposed on nation states that still exist to nurture community and epopular aspirations. To do so, they too need resources. One commonly held value among them is that such resources must be contributed by their members. It had rightly take the form of a levy on what they consume and what they earn. Non payment of taxes undermines the nation state’s ability to service the aspirations of its members.
And the authority vested with the legitimate right to gather and organize these contributions is the national government.
We have experienced an explosion of popular anger when it was discovered that companies, among which large multinationals, were managing not to pay taxes at all by making arrangements with the tax jurisdictions of this or that state to benefit quite legally from the provision of existing legislation in such state.
So now, at the level of this Parliament and of the Commission, exercises are being carried out to understand how and why this has been happening, and to propose policy options that ensure taxes are paid as due.
In this effort, tax practices adopted by multinational and other companies over the years are being strongly criticised – beyond tax evasion, which has always been outside the ban, tax avoidance, aggressive tax planning through profit shifting, artificial transfer pricing plus other tricks, and lack of transparency in tax dealings.
Similarly, taxation provisons adopted by states in Europe and elsewhere are being criticised and sanctioned under the headings of among others: unfair tax competition; outright aadoption of tax haven methods; lack of transparency; effectively, collusion with multinational companies to provide them with ways by which to pay no tax.
Counter measures to all this are being proposed by the European Commission and by this Parliament. Others will be discussing these, no doubt. Indeed a transparent taxation system should promote growth, job creation and fiscal consolidation.
However most measures being discussed involve national competences and should also be discussed at a national level.
For it seems to me that while all the remedies being suggested merit careful study and attention, it must be recognised that they will impact stongly on the existing competences of national governments.
Among the proposals, we find the adoption of a common conslidated tax base; moves towards harmonisation of tax rates within the euro zone; the introduction of a minimum tax rate; amendments to the double taxation agreements entered into by states.
All these issues impact strongly on the autonomy and flexibility of national governments and parliaments to manage their financial affairs.
Not all tax competition is harmful. Having the same tax structures for countries which have different economic structures and endowments, especially if they share a common currency, inevitably puts some countries at a permanent disadvantage.
So, as the debates and dialogues within this Parliament and the Commission proceed on this very vital subject, I think that as a matter of urgency, steps should be taken to involve in the ongoing discussion all national Parliaments of the Union. They need to be active participants and decision makers in the process that has been launched.

Facebook Comments

Post a comment