Procedure completed
| Role | Committee | Rapporteur | Shadows |
|---|---|---|---|
| Lead | DEVE | JOLY Eva (Verts/ALE) | SCHNIEBER-JASTRAM Birgit (PPE), GUERRERO SALOM Enrique (S&D) |
| Opinion | ECON | PIETIKÄINEN Sirpa (PPE) | |
| Opinion | INTA | DE SARNEZ Marielle (ALDE) |
Legal Basis RoP 052
Activites
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2011/03/08
Results of vote in Parliament
- Results of vote in Parliament
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T7-0082/2011
summary
The European Parliament adopted a resolution on Tax and Development – Cooperating with Developing Countries on Promoting Good Governance in Tax Matters.Recalling that taxation can be a reliable and sustainable source of development finance if there is a progressive taxation regime, an effective and efficient tax administration to promote tax compliance, and transparent and accountable use of public revenue, Parliament stresses that many developing countries do not even attain a minimum tax level which would be necessary to fund public services. The resolution states that tax provides a source of income that is potentially more stable and sustainable than aid flows and fosters the ownership of the respective countries in a better way.(1) The importance of taxation for meeting the MDGs: Parliament agrees with the Commission that efficient and fair tax systems are crucial for poverty reduction. It welcomes the Commission’s initiative to strengthen the capacities of good tax governance for development and sees the need for a regulatory framework designed to support international tax cooperation. It regrets that too little support has been given so far by donors to tax-related assistance. In this context, it welcomes the Commission's proposal to provide enhanced support for assisting developing countries in tax reforms. Among the other salient issues, Parliament concentrates on the difficulties encountered by developing countries in raising tax revenues. Parliamentnotes with concern that the tax system in many poor countries remains characterised by extremely narrow tax bases, tax exemptions for the elite, corporate tax holidays providing a strong incentive for tax avoidance. Pointing out that efficient, progressive and equitable taxation systems are crucial for development, Members underline that further attention should be paid to difficulties encountered by developing countries in raising domestic revenues in a globalised context. The resolution stresses that the poorest countries are having difficulties in compensating for the decline in trade taxes resulting from the current global context of trade liberalisation, by replacing them with other types of domestic resources, since at best about 30% of lost trade taxes have been replaced. Tax revenue must not be regarded as an alternative to foreign aid, but rather as an integral part of public revenue facilitating these countries’ development. Members highlight that tax havens weaken democratic governance, make economic crime more profitable, encourage rent-seeking and increase the inequitable distribution of tax revenues. Therefore, they urge the EU to make the fight against tax havens and corruption a top priority of the agenda in international finance and development institutions.(2) Supporting effective, efficient, fair and sustainable tax systems: good governance and the quality of institutions represent the most important driver for economic prosperity. Accordingly, Parliament urges the Commission to assist the tax authorities, the judiciary and the anticorruption agencies in developing countries. The principles of good governance in tax matters should be integrated into the programming, implementation and monitoring of country and regional strategy papers. The Commission is called upon to include a tax governance clause, including monitoring of its implementation, in relevant agreements between the EU and third countries. Member States are urged to implement their commitments regarding their aid for tax and to combat bribery committed by companies domiciled in their jurisdictions but which have operations in developing countries.On the issue of Economic Partnership Agreements (EPA), the resolution points out that the decline in customs resources brought about in particular by Economic Partnership Agreements with the European Union is having a negative impact on the financial resources immediately available to developing countries. In that context, and to compensate for those losses, it calls on the Commission to encourage developing countries, as part of any assistance given to improve their national tax systems. Furthermore, it calls for the systematic implementation, in the framework of EPAs, of measures to support tax reforms, in the form of both material assistance (IT systems) and organisational assistance (legal and tax training for tax authority staff), if requested by a developing country.Parliament reaffirms the need to enhance the degree of coherence between the European Union’s development policy and its trade policy given that the European Union remains the leading development aid donor, accounting for 56% of the worldwide total, worth €49 billion in 2009. It stresses that, in this context, it ought to be a priority for developing countries to put in place an efficient tax system so as to reduce their dependence on foreign aid and other, unpredictable, external financial flows.Parliament also calls on the development countries to:give priority to progressive direct taxes over indirect taxes, particularly those levied on consumption, which, by their nature, hit low-income population groups harder;devise alternative sources of revenue collection to encourage innovation, entrepreneurship and the creation of SMEs, strengthening ownership and local development;limit administrative costs related to tax;tax companies which may account for increased tax revenue (for example those engaged in the extraction of raw materials);negotiate with multinational corporations in order to secure an equitable share of corporations’ profits;favour a system of low-rate taxation of low and medium incomes founded on a broader tax base and excluding all discretionary tax exemptions and preferences, including for the extractive industries.Parliament calls for concentration on the principles of neutrality, equality and simplicity with regard to tax systems in developing countries, which should be achieved by:a tax that does not take up a greater share of poor people’s income but a greater proportion of the taxpayer`s income or wealth as it increases;a tax that does not discriminate on the basis of gender, sexual orientation, type of household, citizenship or civil status;a clear, simple and transparent tax system which excludes different types of undesirable interpretation of tax laws with the aim of gaining massive tax reductions at the expense of social spending;identical treatment for tax purposes of true gains and true losses from any given source of income, meaning that the gains are taxable and the losses deductible;a level of taxation that is robustly linked to different stages of economic development;the unification of multiple corporate income tax rates by calculating income tax rates on the basis of business volume rather than business sectors.(3) Working towards a transparent, cooperative and fair international tax environment: Parliament stresses that trade mispricing is one of the most prominent drivers of illicit financial outflows. It calls on the Commission to contribute to enhancing public expertise on such issues in developing countries, and to work upon concrete proposals to ensure that the G20, the OECD, the UN and the WTO consider a broader set of indicators and methods for tackling trade mispricing, among which are the US ‘comparable profit methods’ that have shown promise in determining the incorrect pricing of transactions. It calls for a review of global tax rules and urge the EU to defend within the G20 and OECD the principle of the automatic exchange of information on tax matters along the lines of the EU Savings Tax Directive.Once again, Members call for the introduction of a tax on financial transactions, the revenue from which would improve the functioning of the market by reducing speculation and help to finance global public goods such as development and the fight against climate change, and reduce public deficits. Contrary to the committee responsible’s opinion, Parliament rejects the idea that such a tax ought to be as broadly based as possible but, failing that, that the financial transaction tax should be introduced as a first step at the EU level.Parliament calls for the approach as regards extractive industries to be reformed. It urges the development of initiatives to promote greater transparency in natural resource rents. Members stress that exploitation of natural resources should be pursued in order to help a country meet its broader social and economic goals. New arrangements in this field should take the form of generalised international standards. The Commission is called upon to step up its development assistance on the formulation of contracts between multinational companies and developing countries on resource exploitation issues.Lastly, Parliament calls for the international architecture to combat tax havens to be improved. It deplores the fact that the G20 has not yet proposed a clear timetable and concrete sanction mechanism to make effective the fight against tax havens. It recalls that as much as EUR 800 billion is lost each year from developing countries to tax havens and illicit financial flows. The resolution stresses that conventional ODA will fail to eradicate global poverty if no ambitious measures are taken within the G20, the OECD and the EU to clamp down on tax havens and harmful tax structures. It notes that, since the G20 Summit of 2 April 2009, offshore financial centres have committed to OECD standards on transparency and exchange of information. It notes however that the harmful structures of tax havens still prevail and calls once more for action beyond the OECD framework to combat tax havens in view of their various shortcomings. It also calls for:automatic information exchange to take place in all circumstances;the adoption of an international convention with the purpose of eliminating harmful tax structures that would include sanctions both for non-cooperative jurisdictions and for financial institutions that operate with tax havens; the EU to adopt measures similar to the US Stop Tax Haven Abuse Act and to consider the possibility of withdrawing banking licences from financial institutions that operate with tax havens;international disclosure of the structures of vulture funds to identify them and ban their activities;the establishment or (if they are already in place) institutional improvement of so called (semi-)autonomous revenue authorities (ARA), through adequate systems of checks and balances, to prevent abuse of tax authorities.The resolution calls for a clause to be introduced providing for a mandatory overall review of all EPAs within three to five years and for the provisions of each agreement to be amended to make them more conducive to poverty eradication, sustainable development and regional integration. A mandatory review of individual countries’ progress in implementing tax reforms or efficient tax collection in line with the latest versions of the OECD Model Tax Convention on Income and on Capital is considered necessary.Lastly, Parliament considers that the development of an efficient tax system in developing countries must become the backbone of their public finances.
- 2011/03/07 Debate in Parliament
- 2011/02/04 Committee report tabled for plenary, single reading
-
2011/01/26
Vote in committee, 1st reading/single reading
-
2010/09/23
Referral to associated committees announced in Parliament
-
2010/07/08
Committee referral announced in Parliament, 1st reading/single reading
-
2010/04/21
Non-legislative basic document published
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COM(2010)0163
summary
PURPOSE: Commission Communication on cooperating with developing countries on promoting good governance in tax matters.CONTEXT: this Communication aims to improve synergies between tax and development polices by suggesting ways in which the EU could assist developing countries in building efficient, fair and sustainable tax systems and administrations with a view to enhancing domestic resource mobilisation in a changing international environment. The European Parliament has expressed strong support in this regard. In many developing countries, the sustainable provision of public services that is necessary to achieve and maintain the Millennium Development Goals (MDG) requires an increase in domestic revenue. Their tax-to-GDP ratio ranges between 10 to 20% as opposed to 25 to 40% in developed countries. Increasing domestic revenue not only creates additional space for supporting MDG-related spending, it also allows a country to assume ownership for its policy choices. The paper sets out the difficulties encountered by developing countries when attempting to increase their domestic tax revenues, including the structure of their economies with large informal sectors, and the predominance of agriculture over industry and services, The increasing integration of international markets and the economic globalisation also affects the effectiveness of national tax systems. Implementation of domestic tax rules becomes difficult in a world with an increasing geographical mobility of taxpayers, the volume of trade and capital flows and the use of new technologies.The Commission believes the donor community can do more and make better use of the existing funds and instruments by setting up a more consistent approach in this area. It highlights the importance of assistance, including technical cooperation, in designing developing countries' tax systems and implementing the principles of good governance in the tax area. For example, in 2009 the Commission has disbursed EUR 117 million on ongoing activities and committed an additional EUR 49 million in new projects to support public financial management, including tax policy and administration, in developing countries.CONTENT: this Communication aims to improve synergies between tax and development polices by suggesting ways in which the EU could assist developing countries in building efficient, fair and sustainable tax systems and administrations with a view to enhancing domestic resource mobilisation in a changing international environment. The European Parliament has expressed strong support in this regard. In many developing countries, the sustainable provision of public services that is necessary to achieve and maintain the Millennium Development Goals (MDG) requires an increase in domestic revenue. Their tax-to-GDP ratio ranges between 10 to 20% as opposed to 25 to 40% in developed countries. Increasing domestic revenue not only creates additional space for supporting MDG-related spending, it also allows a country to assume ownership for its policy choices. The paper sets out the difficulties encountered by developing countries when attempting to increase their domestic tax revenues, including the structure of their economies with large informal sectors, and the predominance of agriculture over industry and services, The increasing integration of international markets and the economic globalisation also affects the effectiveness of national tax systems. Implementation of domestic tax rules becomes difficult in a world with an increasing geographical mobility of taxpayers, the volume of trade and capital flows and the use of new technologies.The Commission believes the donor community can do more and make better use of the existing funds and instruments by setting up a more consistent approach in this area. It highlights the importance of assistance, including technical cooperation, in designing developing countries' tax systems and implementing the principles of good governance in the tax area. For example, in 2009 the Commission has disbursed EUR 117 million on ongoing activities and committed an additional EUR 49 million in new projects to support public financial management, including tax policy and administration, in developing countries. The The Commission proposes to:1)strengthen support to domestic revenue mobilisation in developing countries, in the context of its broader efforts to strengthen good governance and public finance management in these countries, by:increasing the effectiveness of the support to developing countries' capacities to raise domestic revenues in line with the principles of good governance in the tax area. This will be done in particular through a more comprehensive approach in support of tax reforms and administration, increased support to demand-driven regional and international capacity development initiatives, including EITI and IMF initiatives, and better donor coordination at EU and international levels;making best use of relevant dialogue and assessment tools, e.g. governance criteria, profiles, action plans, for ensuring an effective monitoring of domestic revenue issues and good governance commitments in the tax area;better integrating tax issues when assessing budget support eligibility and supporting Public Financial Management reforms;strengthening monitoring capacities in developing countries in the fight against illicit financial flows, including through support to non-state actors;supporting regional institutions and countries engaged in economic regional integration and trade liberalisation, and strengthening their capacity to improve domestic tax revenue mobilisation.2) promote the principles of good governance in tax matters, and support developing countries to fight against tax evasion and other harmful tax practices, by:encouraging and supporting closer cooperation between relevant OECD and UN bodies when developing international standards of tax cooperation, taking into account the specific needs and capacities of developing countries;including, as appropriate, a specific reference to strengthening tax systems and to the principles of good governance in the tax area in all development cooperation agreements with third parties;providing technical cooperation to developing countries committed to the principles of good governance in the tax area to enable them to conclude and implement TIEA and, where appropriate, DTC;supporting the adoption and implementation of the OECD transfer pricing guidelines in developing countries;supporting ongoing research on a country-by-country reporting requirement as part of a reporting standard for multinational corporations, notably in the extractive industry.
- DG Development, PIEBALGS Andris
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COM(2010)0163
summary
Documents
- Non-legislative basic document published: COM(2010)0163
- Committee report tabled for plenary, single reading: A7-0027/2011
- Debate in Parliament: Debate in Parliament
- Results of vote in Parliament: Results of vote in Parliament
- Decision by Parliament, 1st reading/single reading: T7-0082/2011
| Amendments | Dossier |
| 126 |
2010/2102(INI)
2010/10/12
ECON
16 amendments...
Amendment 1 #
Draft opinion Paragraph 1 – point 1 1. Welcomes the Commission's initiative to strengthen the capacities of good tax governance for development and sees the need for a regulatory framework designed to support international tax cooperation, transparency, private sector development and economic growth;
Amendment 10 #
Draft opinion Paragraph 1 – point 3 a (new) 3 a. Welcomes regional initiative on tax cooperation to enable developing countries to discuss the role of taxation in state-building and capacity development and to share best practices on tax administration;
Amendment 11 #
Draft opinion Paragraph 1 – point 3 a (new) 3a. Recognises that the qualitative and quantitative improvement in developing countries’ domestic revenue mobilisation will bear fruit over the long term. Calls on the European Union to maintain its offer of assistance in all its forms for as long as the developing countries consider it necessary for the financing of their own development.
Amendment 12 #
Draft opinion Paragraph 1 – point 5 5. Proposes the inclusion of a specific provision related to good tax governance in the review of the Cotonou Agreement while recognising that lower import taxes to facilitate trade flows can encourage governments to diversify tax revenue streams and create more balanced tax systems;
Amendment 13 #
Draft opinion Paragraph 1 – point 7 7. Calls for
Amendment 14 #
Draft opinion Paragraph 1 – point 7 7. Calls for modernisation of the Transparency Directive to uniformly require companies that fall under the scope of the Directive to report their financial accounts in every country in which they operate, furthermore supports the ongoing work by the OECD with respect to country-by-country guidelines in its guidelines for Multinational Enterprises and its Principles for Corporate Governance to enhance transparency and access to relevant data by tax administrations in developing countries.
Amendment 15 #
Draft opinion Paragraph 1 – point 7 a (new) 7 a. Points out that development experts often express concerns that in many poorer countries governments can come to rely on aid which disincentivises them to investigate other ways of broadening their tax base/tax revenue stream.
Amendment 16 #
Draft opinion Paragraph 1 – point 7 a (new) 7 a. Reiterates reservation as to the Commission's analysis that disclosure of geographical information would in practice not be reduced compared to IAS 14, and considers it vital that management continues to provide segmental information sufficient to allow users to assess the risks and drivers of the business in terms of geography, where relevant country-by-country, and business sector, regrets therefore the absence of initiative of the Commission and urges her again to report back to Parliament on the outcome of the discussion with the IASB on this issue within the next six months;
Amendment 2 #
Draft opinion Paragraph 1 – point 1 1. Welcomes the Commission’s initiative to strengthen the capacities of good tax governance for development and sees the need for a regulatory framework designed to support international tax cooperation, public and private sector development and economic growth;
Amendment 3 #
Draft opinion Paragraph 1 – point 1 a (new) 1a. Points out that good governance in tax matters cannot be exported or imposed from outside, and that it is up to each of the countries to decide its own tax policy. In that context, calls on the Commission and the national governments not to hamper, and to cooperate with, any countries which opt, consistently and fairly, for an increase in taxation that affects foreign undertakings present on their territory, particularly those operating in the fields of extraction of primary resources, which are an important source of wealth in developing countries.
Amendment 4 #
Draft opinion Paragraph 1 – point 1 b (new) 1b. Points out that the decline in customs resources brought about in particular by Economic Partnership Agreements with the European Union is having a negative impact on the financial resources immediately available to developing countries. In that context, and to compensate for those losses, calls on the Commission to encourage developing countries, as part of any assistance given to improve their national tax systems, to give priority to progressive direct taxes over indirect taxes, particularly those levied on consumption, which, by nature, hit low-income population groups harder.
Amendment 5 #
Draft opinion Paragraph 1 – point 3 3. Calls on the Commission to adopt more stringent criteria for the identification of tax havens and to work towards an internationally binding multilateral automatic tax-information exchange agreement, including for trusts and foundations, envisaging countermeasures in the event of non-compliance;
Amendment 6 #
Draft opinion Paragraph 1 – point 3 3. Calls on the Commission to adopt more stringent criteria for the identification of tax havens and to work towards an internationally binding multilateral automatic tax-information exchange agreement envisaging countermeasures in the event of non-compliance while recognising that developing countries may seek to adopt competitive tax rates in order to attract inward investment thereby creating jobs for local citizens;
Amendment 7 #
Draft opinion Paragraph 1 – point 3 3. Calls on the Commission to adopt more stringent criteria for the identification of tax havens and to work towards an internationally binding multilateral automatic tax-information exchange agreement envisaging countermeasures in the event of non-compliance; calls on the Commission to support developing countries in their fight against illicit outflows and capital flights as it is identified as a major obstacle to mobilisation of domestic revenue for development;
Amendment 8 #
Draft opinion Paragraph 1 – point 3 3. Calls on the Commission to adopt more stringent criteria for the identification of tax havens and to work towards an internationally binding multilateral automatic tax-information exchange agreement envisaging countermeasures in the event of non-compliance; draws the Commission’s attention in particular to report P6 - TA(2009)0325 and to the recommended measures for combating tax havens.
Amendment 9 #
Draft opinion Paragraph 1 – point 3 a (new) 3 a. Calls for the introduction of a tax on financial transactions, the revenue from which would improve the functioning of the market by reducing speculation and help to finance global public goods such as development and the fight against climate change, and reduce public deficits; considers that such a tax ought to be as broadly based as possible but, failing that, that the financial transaction tax should be introduced as a first step at the EU level; calls on the Commission to swiftly produce a feasibility study taking into account the global level playing field and come forward with concrete legislative proposals;
source: PE-449.011
2010/10/28
INTA
26 amendments...
Amendment 1 #
Draft opinion Paragraph 1 1. Recalls that the objective of
Amendment 10 #
Draft opinion Paragraph 3 a (new) 3a. Stresses that tax revenue must not be regarded as an alternative to foreign aid but as an integral part of public revenue facilitating these countries’ development;
Amendment 11 #
Draft opinion Paragraph 3 a (new) 3a. Recalls that tax evasion in tax havens represents a considerable financial loss, particularly for developing countries, and that measures to combat tax havens are one of the priorities for the EU with a view to effectively helping developing countries to gain access to their tax revenue;
Amendment 12 #
Draft opinion Paragraph 3 b (new) 3b. Considers it necessary for the OECD to draw up new guidelines on transfer pricing, an essential means of preventing certain multinationals from transferring their profits to the countries with the most favourable tax regimes and compelling them to pay their taxes in the countries – including developing countries – where they have generated their real profits;
Amendment 13 #
Draft opinion Paragraph 4 4. Considers that a system of low-rate taxation founded on a broader tax basis and
Amendment 14 #
Draft opinion Paragraph 4 4. Considers that a system of low-rate taxation for low and medium incomes founded on a broader tax basis and excluding all discretionary tax exemptions and preferences, including for the extractive industries, is indispensable; emphasises the need
Amendment 15 #
Draft opinion Paragraph 4 4. Considers that a system of low-rate taxation founded on a broader tax basis and excluding all discretionary tax exemptions and preferences, including for the extractive industries, is indispensable; emphasises the need for incentive measures to involve investors more closely in projects with a positive local impact in economic, social and environmental terms, while avoiding creating any opportunities for a form of fiscal dumping;
Amendment 16 #
Draft opinion Paragraph 4a (new) 4a. Notes with concern that Governments in developing countries, in order to attract foreign investment, are often offering tax exemptions in the range of ten and more years as well as cost-free public service provisions; calls on the Commission to design a basic accountability mechanism on tax payments of EU-based investors in the framework of the new EU investment policy and EU International Investment Treaties with third countries;
Amendment 17 #
Draft opinion Paragraph 4b (new) 4b. Regards the wide-spread practice of foreign companies investing especially in resource-rich countries of bribing public officials in order to obtain licences below fair prices and exemptions from revenue payments as the single most detrimental factor for the development of some of the poorest countries; commends the new US law of July 2010 (Dodd-Frank Wall Street Reform and Consumer Protection Act) requiring all oil, gas and mining companies registered with the U.S. Securities and Exchange Commission to publish how much they pay to foreign countries and the U.S. government; calls on the Commission to recommend a similar "Publish What You Pay" scheme to EU Member States;
Amendment 18 #
Draft opinion Paragraph 5 5. Considers that the development of an efficient tax system that does not discriminate against low and medium incomes and therefore introduces progressive taxation and taxes on corporate profits that must be paid in the country where profits were accumulated must be one of the
Amendment 19 #
Draft opinion Paragraph 5 5. Considers that the development of an efficient tax system
Amendment 2 #
Draft opinion Paragraph 1 1. Recalls that
Amendment 20 #
Draft opinion Paragraph 5 a (new) 5a. Recalls that, while the positive impact of EPAs will be felt only in the long term, losses of revenue are an immediate consequence of reductions in customs tariffs;
Amendment 21 #
Draft opinion Paragraph 5 b (new) 5b. Stresses the need to take the necessary measures to counterbalance the loss of revenue arising from the substitution of imports of European products which are exempt from customs tariffs for imports from third countries which would have been subject to customs tariffs;
Amendment 22 #
Draft opinion Paragraph 5a new 5a. Is concerned about the spread and size of capital flight to tax havens involving income-rich citizens and government officials of developing countries; calls on the OECD Member States to recommend additional transparency measures for banks and financial institutions regarding foreign account holdings; calls on the Commission to respect domestic regulatory freedom in its negotiations with developing countries on Financial Service Liberalization within Free Trade Agreements, in order to allow for capital controls;
Amendment 23 #
Draft opinion Paragraph 6 6. Calls for the creation, in the EPA framework, of an independent monitoring mechanism to assess the net tax impact of removing customs duties and at the same time progress being made in the area of tax reform in each country; calls for a
Amendment 24 #
Draft opinion Paragraph 6 6. Calls for the creation, in the EPA framework, of an independent monitoring mechanism to assess the net tax impact of removing customs duties and at the same time progress being made in the area of tax reform in each country
Amendment 25 #
Draft opinion Paragraph 6 6. Calls for the creation
Amendment 26 #
Draft opinion Paragraph 6 6. Calls for the creation, in the EPA framework, of an independent monitoring mechanism to assess the net tax impact of removing customs duties and at the same time progress being made in the area of tax reform
Amendment 3 #
Draft opinion Paragraph 1 1. Recalls that the objective of
Amendment 4 #
Draft opinion Paragraph 2 2. Calls for systematic implementation, in the framework of Economic Partnership Agreements (EPAs), of measures to support tax reforms in developing countries, in the form of both material assistance (IT systems) and organisational assistance (legal and tax training for tax authority staff); underlines the need
Amendment 5 #
Draft opinion Paragraph 2 2. Calls for systematic
Amendment 6 #
Draft opinion Paragraph 2 2. Calls for systematic implementation, in the framework of Economic Partnership Agreements (EPAs), of measures to support tax reforms, in the form of both material assistance (IT systems) and organisational assistance (legal and tax training for tax authority staff); underlines the need to make a special effort with
Amendment 7 #
Draft opinion Paragraph 3 3. Reaffirms the need to enhance the coherence between the European Union's development policy and its trade policy; recalls that while the crisis
Amendment 8 #
Draft opinion Paragraph 3 3. Reaffirms the need to enhance the coherence between the European Union's development policy and its trade policy; recalls that the crisis has exacerbated the volatility of commodities prices and has caused capital and aid flows to developing countries to dry up; stresses that, in this context, it is a priority to put in place an efficient tax system that exempts people with low incomes and does not discriminate against people with medium incomes so as to reduce developing countries' dependence on
Amendment 9 #
Draft opinion Paragraph 3 3. Reaffirms the need to enhance the coherence between the European Union's development policy and its trade policy; recalls that the crisis has exacerbated the volatility of commodities prices and has
source: PE-452.593
2010/11/30
DEVE
84 amendments...
Amendment 1 #
Motion for a resolution Citation 2 a (new) – having regard to its resolution of 25 March 2010 on the effects of the global financial and economic crisis on developing countries and on development cooperation1, 1 Texts adopted P7_TA(2010)0034.
Amendment 10 #
Motion for a resolution Recital C b (new) Cb. whereas tax havens, that offer secrecy rules and fictional domiciles combined with "zero tax" regimes in order to attract capital and revenues that should have been taxed in other countries, generate harmful tax competition,
Amendment 11 #
Motion for a resolution Recital C c (new) Cc. whereas tax competition has resulted in a shift of the tax burden to workers and low-income households and has forced damaging cutbacks in public services in poor countries,
Amendment 12 #
Motion for a resolution Recital C a (new) Ca. whereas round-tripping, tax incentives and tax competition between developing countries often lead to detrimental results which are evident when countries are "selling" their tax systems, and companies are "buying" into them, in a marketplace analogous to competition between companies,
Amendment 13 #
Motion for a resolution Recital C a (new) Amendment 14 #
Motion for a resolution Recital D D. whereas the possibility of enhancing domestic resource mobilisation is further weakened by the global context, characterised by customs tariff liberalisation, whereas IMF research shows that while rich countries have managed to offset the decline of trade taxes as a principal source of income with other sources of revenue, notably VAT, the poorest countries have at best replaced about 30% of lost trade taxes,
Amendment 15 #
Motion for a resolution Recital D D. whereas the possibility of enhancing domestic resource mobilisation is further
Amendment 16 #
Motion for a resolution Recital D D. whereas the
Amendment 17 #
Motion for a resolution Recital D a (new) Da. whereas the "mapping survey" led by the ITC demonstrates that further donor coordination is needed in the area of taxation and development,
Amendment 18 #
Motion for a resolution Recital D a (new) Da. whereas the existence of a large informal sector in the economy is holding back the mobilisation of domestic resources,
Amendment 19 #
Motion for a resolution Recital D a (new) Da. whereas a lot of developing countries are missing out on the commodity boom by failing to receive a decent share of mineral royalties which are justified,
Amendment 2 #
Motion for a resolution Citation 3 b (new) – having regard to its resolution of 15 June 2010 on progress towards the achievement of the Millennium Development Goals: mid-term review in preparation of the UN high-level meeting in September 20101, 1 Texts adopted P7_TA-PROV(2010)0210.
Amendment 20 #
Motion for a resolution Recital D b (new) Db. whereas many developing countries do not even attain a minimum tax level which would be necessary to fund public services and international commitments like poverty reduction,
Amendment 21 #
Motion for a resolution Recital D c (new) Dc. whereas tax provides a source of income that is potentially more stable and sustainable than aid flow and fosters the ownership of the respective countries in a better way,
Amendment 22 #
Motion for a resolution Recital D d (new) Dd. whereas the reporting on a consolidated base makes it often difficult to identify companies to be taxed and to determine the right tax level due to their complex corporate structures and the distribution of economic activity between them,
Amendment 23 #
Motion for a resolution Recital D f (new) Df. whereas so called vulture funds, often based in tax havens, increasingly buy up the debt of developing countries at a huge discount and afterwards sue for the original amount of debt (frequently with interest and penalty fees) and in doing so, restrict to a substantial degree the extent to which developing countries can act thanks to their additional tax revenues,
Amendment 24 #
Motion for a resolution Recital D g (new) Dg. whereas there are no laws that cap the amount of profits that a vulture fund can collect through litigating against developing countries to collect default debt and whereas there are no regulatory structures that disclose who vulture funds are and also how much they paid for this debt that was previously considered worthless,
Amendment 25 #
Motion for a resolution Recital D h (new) Dh. whereas in a lot of developing countries there exists multiple corporate income tax rates based not only on income and dividends, but also on business sectors, meaning that the sectoral allocation of resources is distorted by differences in tax rates,
Amendment 26 #
Motion for a resolution Recital D i (new) Di. whereas tax compliance shall be defined as seeking to pay at the right place, at the right time, where "right" means that the economic substance of the transactions undertaken coincides with the place and form in which they are reported for taxation purposes,
Amendment 27 #
Motion for a resolution Paragraph 2 2.
Amendment 28 #
Motion for a resolution Paragraph 2 a (new) 2a. Notes that more emphasis should be placed on efforts to undertake capacity building within developing countries in order to help them make effective use of the exchange of information and effectively counter tax evasion with their own, internal, legislation;
Amendment 29 #
Motion for a resolution Paragraph 3 3. Notes with concern that the tax system in many poor countries remains characterised by extremely narrow tax bases; tax exemptions for the elite; corporate tax holidays providing a strong incentive for tax avoidance, as taxed enterprises can enter into economic relationships with exempt ones to shift their profits, massive revenues from natural resources going unaccounted
Amendment 3 #
Motion for a resolution Citation 3 c (new) – having regard to the G20 summit held in Seoul on 11-12 November 2010,
Amendment 30 #
Motion for a resolution Paragraph 3 3. Notes with concern that the tax system
Amendment 31 #
Motion for a resolution Paragraph 4 4. Deplores that jurisdictions which lack transparency on tax matters, the so-called tax havens, weaken democratic governance, make economic crime more profitable, encourage rent-
Amendment 32 #
Motion for a resolution Paragraph 5 Amendment 33 #
Motion for a resolution Paragraph 5 Amendment 34 #
Motion for a resolution Paragraph 5 5. Underlines that
Amendment 35 #
Motion for a resolution Paragraph 5 5. Underlines that
Amendment 36 #
Motion for a resolution Paragraph 5 5. Underlines that globalisation exacerbates the fiscal problems of developing countries, as they tend to grant multiple exemptions to large domestic and foreign companies in order to attract investments;
Amendment 37 #
Motion for a resolution Paragraph 6 6. Stresses that the decline in trade taxes, resulting from WTO obligations and regional trade agreements,
Amendment 38 #
Motion for a resolution Paragraph 6 6. Stresses that the
Amendment 39 #
Motion for a resolution Paragraph 6 a (new) 6a. Stresses that tax havens, by increasing competition over mobile capital, encroach upon the sovereignty of developing countries to tax income from capital as a means to widen the tax base, while they have already a narrower tax base than rich countries;
Amendment 4 #
Motion for a resolution Recital A a (new) Aa. whereas taxation can be a reliable and sustainable source of development finance if there is a progressive taxation regime; an effective and efficient tax administration to promote tax compliance; transparent and accountable use of public revenue,
Amendment 40 #
Motion for a resolution Paragraph 6 b (new) 6b. Recalls that asymmetry of information, that results from tax havens secrecy rules, reduces the efficiency of international financial markets, since that has led to higher risk premiums and thereby increased borrowing costs for both rich and poor countries;
Amendment 41 #
Motion for a resolution Paragraph 7 7. Urges the Commission to
Amendment 42 #
Motion for a resolution Paragraph 7 7.
Amendment 43 #
Motion for a resolution Paragraph 7 7. Urges the Commission to upgrade its assistance to strengthen the judiciary and anti-corruption agencies in developing countries, to effectively integrate the principles of good governance in tax matters into the programming, implementation and monitoring of country and regional strategy papers, and to systematically include clauses on good governance in future trade agreements; recommends that the Commission includes national parliaments of the developing countries in the budgetary process, thereby fostering a harmonious relationship and promoting greater transparency in this process;
Amendment 44 #
Motion for a resolution Paragraph 7 7. Urges the Commission to upgrade its assistance
Amendment 45 #
Motion for a resolution Paragraph 7 a (new) 7a. Calls on the Commission to include a tax governance clause, including monitoring of its implementation, in relevant agreements with third countries by the EU;
Amendment 46 #
Motion for a resolution Paragraph 8 8. Recalls that the main challenge for poor countries is to broaden the tax base;
Amendment 47 #
Motion for a resolution Paragraph 8 8. Recalls that the main challenge for poor countries is to broaden the tax base; points out that the decline in trade taxes
Amendment 48 #
Motion for a resolution Paragraph 8 8. Recalls that the main challenge for poor countries is to broaden the tax base; points out that the decline of trade taxes has led to the introduction of consumption taxes (VAT or energy taxes); considers that even if VAT can enable the widening of the tax base in economies with large informal sectors, VAT is not an ideal instrument as it hits poor people the hardest; believes that EU's assistance to tax reform should be geared to
Amendment 49 #
Motion for a resolution Paragraph 8 a (new) 8a. Notes with concern that billions of dollars per year have left the African continent between 1991 and 2004; in particular, underlines that these outflows are estimated at 7.6% of the annual GDP of the region, which make African countries net creditors of donor countries; considers that ODA and debt relief provided by developed countries will only be effective if concrete measures are taken equally by the G20, the OECD and the EU to ensure that the potential tax base of developing countries is not undermined through tax evasion; encourages in this context the UN and the OECD, in close cooperation with the African Tax Administration Forum, to pursue their work in this area;
Amendment 5 #
Motion for a resolution Recital B B. whereas developing countries face important challenges in raising tax revenues due to insufficient human and financial resources to collect taxes, weak administrative capacity, corruption, lack of legitimacy of the political system
Amendment 50 #
Motion for a resolution Paragraph 8 a (new) 8a. Insists that the adequate means of devising alternative sources of revenue collection should be supportive of and not infringe upon innovation, entrepreneurship and the creation of SMEs, strengthening ownership and local development;
Amendment 51 #
Motion for a resolution Paragraph 8 a (new) 8a. Underlines that the administrative costs especially for a multiple-rate VAT system might be to too high for developing countries whose tax authorities are not equipped with the necessary financial and human resources and therefore shall be carefully scrutinized; believes that in such cases excises shall be highly selective, narrowly targeting a few goods mainly on the grounds that their consumption entails negative externalities on society and which are usually inelastic in demand (tobacco, alcohol et cetera); calls in case of limitation also for the identification and taxation of those companies which may account for increased tax revenue (for example those engaged in the extraction of raw material);
Amendment 52 #
Motion for a resolution Paragraph 8 a (new) 8a. Stresses that an important requirement to increase direct taxation should be bringing the informal sector into the formal economy and improving the business environment;
Amendment 53 #
Motion for a resolution Paragraph 9 9. Recalls th
Amendment 54 #
Motion for a resolution Paragraph 9 9. Recalls th
Amendment 55 #
Motion for a resolution Paragraph 9 9. Recalls that tax competition affects the way the tax burden is distributed between owners of capital and wage earners; underlines that the costs of tax competition are higher for developing countries since they derive a larger part of their tax revenues from capital and have little
Amendment 56 #
Motion for a resolution Paragraph 9 a (new) 9a. Points out that the French government has commissioned research on the topic of political incentives for taxation, but more is needed; therefore asks the Commission to study whether different approaches to transferring aid, e.g. grants versus loans, could help to limit or offset the potentially negative effects of aid on revenue raising; and whether budget support and related improvements in transparency and effectiveness of public expenditure management contribute over the longer term to increased willingness of citizens to pay tax;
Amendment 57 #
Motion for a resolution Paragraph 9 b (new) 9b. Notes that too little attention has been paid to how governments can use tax policies to reduce inequalities in income and well-being by minimizing existing gender differences in tax liabilities;
Amendment 58 #
Motion for a resolution Paragraph 9 a (new) Amendment 59 #
Motion for a resolution Paragraph 10 10. Stresses that trade mispricing is one of the most prominent drivers of illicit financial outflows; calls on the
Amendment 6 #
Motion for a resolution Recital B B. whereas developing countries face important challenges in raising tax revenues due to insufficient human and financial resources to collect taxes, weak administrative capacity, corruption, lack of legitimacy of the political system and
Amendment 60 #
Motion for a resolution Paragraph 10 a (new) 10a. Calls to fight against illegitimate transfer price manipulation (TPM) and for the review of global tax rules which go beyond the comparable profits method, in case that there might be other more promising alternatives which adress the problem of misprising more properly; stresses that the EU, the G20, the EU and the WTO in general shall concentrate their efforts on approaches that rely on the so called "arms length principle (ALP) stating that tax-relevant transactions must be under the same conditions as those which would be made between independent enterprises;
Amendment 61 #
Motion for a resolution Paragraph 11 11.
Amendment 62 #
Motion for a resolution Paragraph 12 12. Urges the development of initiatives to promote greater transparency in natural
Amendment 63 #
Motion for a resolution Paragraph 12 a (new) 12a. Stresses that exploitation of natural resources should be pursued in order to help a country meet its broader social and economic goals; for governments in developing countries this means to outline a vision, if so desired together with international stakeholders and expertise, of how the resource sector fits in the country’s economic future; for some countries the best use of resource endowments may be to leave them in the ground for future use; for others, it may be to extract rapidly, as an intermediary source of domestic revenue, in order to generate revenues to sustain the investment necessary for growth and to meet urgent human needs;
Amendment 64 #
Motion for a resolution Paragraph 12 b (new) 12b. Points out that developing countries should be equal partners in the discussion and adoption of new initiatives in the sector of resource extraction; stresses that new arrangements in this field should take the form of a generalised international standards in order to avoid the creation of another patchwork of regulations which would be counterproductive from the point of view of governments, tax administration and international companies;
Amendment 65 #
Motion for a resolution Paragraph 12 c (new) 12c. Stresses that the proposals of the Commission and non-governmental transparency initiatives for the sector of extractive industries, e.g. the Natural Resource Charter, the Equator Principles and the Guidelines for Investors and Companies by 'Critical Resource', are in effect pro-business; they produce legal security, sustainable long-time partnerships and pose as safeguards against renationalization, reopening of negotiations or expulsion; notes that there are problems to be addressed as well, for instance the fact that businesses may have to disclose commercially sensitive information which puts them at a competitive disadvantage, or that some agreements with governments are based on information being kept secret;
Amendment 66 #
Motion for a resolution Paragraph 12 d (new) 12d. Notes that resource rents should always be seen as an intermediary means to increase domestic revenue; points out that success in taxation of resources often brings advances in direct taxes, such as corporate income taxes, and non-tax revenues, such as royalty fees;
Amendment 67 #
Motion for a resolution Paragraph 12 a (new) 12a. Points out that a large number of rentier states, that benefit from abundant resource rents, particularly those from oil and minerals, have little incentive to be accountable, responsive or efficient; reiterates that strong institutional and democratic control mechanisms are crucial for combating economic crime; in particular, calls on the Commission to step up its development assistance on the formulation of contracts between multinational companies and developing countries on resource exploitation issues;
Amendment 68 #
Motion for a resolution Paragraph 12 a (new) 12a. Demands the Commission and the Council to engage more with the Extractive Industries Transparency Initiative, through provision of finances and participation in its governing body;
Amendment 69 #
Motion for a resolution Paragraph 13 13. Recalls that the quality of financial reporting is crucial to combat tax evasion effectively; considers that country-by- country reporting is of utmost importance for extractive industries; but recalls that it would equally be beneficial for investors in all sectors, thereby contributing to good governance globally; therefore insists that the IASB includes within its International Financial Reporting Standard a requirement that all multinational corporations report their income and tax paid on a country-by-
Amendment 7 #
Motion for a resolution Recital C C. whereas the major forms of illicit financial flow and capital flight especially include: transfer mispricing
Amendment 70 #
Motion for a resolution Paragraph 13 13. Recalls that the quality of financial reporting is crucial to combat tax evasion effectively;
Amendment 71 #
Motion for a resolution Paragraph 13 a (new) Amendment 72 #
Motion for a resolution Paragraph 15 15. Stresses that conventional ODA will fail to eradicate global poverty, but it helps if
Amendment 73 #
Motion for a resolution Paragraph 16 16. Notes that since the G20 Summit of 2 April 2009, offshore financial centres have committed to OECD standards on transparency and exchange of information; notes however that the harmful structures of tax havens still prevail; calls once more for action beyond the OECD framework to combat tax havens in view of their various shortcomings; in this respect, reiterates its concerns about the fact that the OECD international standards require exchange of information on request but that there is no automatic exchange of information on the line of the saving tax directive; likewise criticizes the fact that the OECD allows governments to escape its blacklist merely by promising to adhere to the information exchange principles, without ensuring that these principles are effectively put into practise; considers also that the requirement to conclude a number of 12 agreements with other countries jurisdictions to be removed from the backlist is arbitrary as it doesn't refer to any qualitative indicators allowing to make an objective assessment of the fulfilment of good governance practises;
Amendment 74 #
Motion for a resolution Paragraph 16 a (new) 16a. Highlights that as much as 800 billion euros is lost each year from developing countries to tax havens and illicit financial flows; notes that greater transparency in the financial process could be a decisive step towards poverty alleviation and significant wealth creation;
Amendment 75 #
Motion for a resolution Paragraph 16 a (new) 16a. Considers that automatic information exchange should take place in all circumstances; welcomes in this respect the Commission's proposal on administrative cooperation in the field of taxation in order to extend cooperation between the Member States to cover taxes of any kind, abolish bank secrecy and establish the automatic exchange of information as a general rule;
Amendment 76 #
Motion for a resolution Paragraph 16 b (new) 16b. Welcomes that some member states are signatories of the Council of Europe- OECD Convention on Mutual Administrative Assistance in Tax Matters, and urges the 17 member states that have not done so to join the Convention;
Amendment 77 #
Motion for a resolution Paragraph 16 c (new) 16c. Calls on the EU to step up its action and to take concrete measures, such as sanctions, against tax evasion and illicit capital flight; demands the Council to examine the possibility for a multilateral mechanism of automatic tax information exchange in close collaboration with UN Committee of Experts on International Cooperation in tax matters;
Amendment 78 #
Motion for a resolution Paragraph 17 17.
Amendment 79 #
Motion for a resolution Paragraph 18 18.
Amendment 8 #
Motion for a resolution Recital C C. whereas the major forms of illicit
Amendment 80 #
Motion for a resolution Paragraph 18 a (new) 18a. Considers that the EU should also ensure consistency in the implementation at EU and international level of standards in the areas of prudential supervision, taxation and money laundering;
Amendment 81 #
Motion for a resolution Paragraph 18 a (new) 18a. Calls for a international disclosure of the structures of vulture funds to identify them and ban their activities;
Amendment 82 #
Motion for a resolution Paragraph 18 b (new) 18b. Stresses that tax administrations in developing countries need to cooperate if they are not part of the respective ministry of finance, especially over tax and budgetary policy by ways that do not stimulate rivalry and jealousy, but foster the nature of good relationship and good governance in tax matters;
Amendment 83 #
Motion for a resolution Paragraph 18 c (new) Amendment 84 #
Motion for a resolution Paragraph 18 d (new) Amendment 9 #
Motion for a resolution Recital C a (new) Ca. whereas off-shore centres and tax havens facilitate an annual illicit capital flight of US$1 trillion; whereas these illicit monetary outflows are roughly ten times the amount of aid money going into developing countries for poverty alleviation and economic development,
source: PE-452.851
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