Tax evasion and avoidance in the context of a EU-Mercosur FTA

On May 2 and 3, 2018, GUE/NGL organized an event on the EU-Mercosur Free Trade Agreement (FTA) and the alternatives to Free trade Agreements, in which it had a workshop on ‘Democracy and Tax Evasion”.

Several issues where identified as problematic in such workshop, being one of them that the problem of tax evasion and tax avoidance is that it can normally be done in ways that are more effective by the high net worth individuals and the big transnational companies. And this is why we have seen more and more often that the 1% richer is getting richer, and the gap is getting wider and wider. This erodes democracy, and the problem affects both EU and non-EU countries.

Moreover, tax competition is lowering corporate taxation; transnational companies end up paying 0.05% in corporate tax, and this is also because of the tax benefits granted to companies in different sectors that are problematic for environmental reasons as well, such as the forestall or the mining ones.

This also relates to the fact that there is a minimization of compliment by companies on any type of legislation, and not only tax law. On the other hand, society does not seem to condemn these actions, and the fact that the governments promote corruption, encourages this behaviour in the society.

As part of the conclusions of this workshop on how to move forward, the following proposals were made:

  • To inhibit officials to have offshore accounts, in a similar way to what has been done by Ecuador, and is being proposed by the opposition in the Argentine Congress;
  • Possible fiscal harmonization
  • To maintain capital controls, at least in aspects affecting taxation.

For more information on the event and to watch the videos of the different conferences held, click here.

Also, find some background notes not tax evasion, tax avoidance and FTAs, here.