Letter to MEPs: support good governance in tax matters

Next Monday Members of the European Parliament will be discussing a new report by its Development Committee on promoting good governance in tax matters. The report has a particular focus on tax havens, which is not unexpected since the main driving force behind it is Eva Joly MEP, who chairs the Development Committee and is a long-standing critic of offshore secrecy (read Nick Shaxson's Treasure Islands for more about her great work).

TJN has sent the following letter to MEPs asking their support for this hugely important report:

Dear MEP

European Parliament Report on tax and development

On 7th March 2011, the European Parliament will discuss and vote through the report “Tax and Development – Cooperating with Developing Countries on Promoting Good Governance in Tax Matters” led by Member of the European Parliament Eva Joly.

The Tax Justice Network (TJN) warmly welcomes the report adopted almost unanimously by the Development Committee of the European Parliament. It confirms the Parliament’s political leadership on these issues, as well as its commitment to put an end to tax evasion by multinational companies from poor countries, which according to recent estimates amounts to more than USD 800 billion every year.

If the majority of MEPs endorse this report, this would set high standards on financial integrity for European institutions and Member States, and would strengthen political leadership of the European Parliament on these matters at the global level.

TJN strongly supports the points of the report which:

· Outline the loss of tax revenue in developing countries;

· Call for action to combat illegitimate transfer price manipulation;

· Stress the need to tackle tax competition and tax fraud in developing countries;

· Consider that automatic exchange of tax information should take place in all circumstances;

· Highlight that tax compliance shall be due where real economic activity takes place;

· Underline the importance of a country-by-country reporting for all multinational companies;

· Call for action against tax havens beyond the OECD framework;

· Stress the need to enhance the degree of policy coherence for development within the EU.

We hope you will endorse the report, which could set a historical milestone in the fight against tax evasion and for higher standards of financial integrity.

Yours sincerely

John Christensen, Director