Finland has much work to do to deliver on its promise to combat tax evasion and aggressive tax planning, states KEPA, a Finnish umbrella organisation for hundreds of non-governmental organisations working on global development issues.
KEPA on Friday drew attention to a newly published report analysing the tax laws and practices of 18 countries across Europe.
The report found that harmful tax laws and practices, which are susceptible to being taken advantage of by major multinational corporations to avoid taxes, are in place in nine of the 18 countries.
“The EU has spoken firmly against tax havens, but the report indicates that it has much to do at home. Member states that facilitate tax evasion are allowed to enjoy the benefits of the single market, but they cannot afford to end up on the EU’s black list,” highlights Lyydia Kilpi, an advisor for tax justice and corporate responsibility at KEPA.
She is perplexed especially by the fact that several member states continue to oppose demands to increase tax transparency in spite of the recent tax scandals.
“It is inexplicable that Finland is opposed to the notion of obliging the largest multinational corporations to disclose the basic details of their tax contributions in each of the countries they operate in. This undermines the government’s promise to combat aggressive tax planning,” she views in a press release from KEPA.
Finland receives both praise and criticism in the report titled Tax Games – the Race to the Bottom: Europe’s role in supporting an unjust global tax system 2017.
The country is lauded for passing a law that stipulates that information about the beneficial owners of companies and other legal entities, such as foundations, shall be made public and accessible free of charge. The law, however, has loopholes with respect to the definition of a beneficiary owner, according to the report.
Finland is also reprimanded for its failure to assess the spillover effects of its tax treaties with developing countries and its lack of support for establishing an intergovernmental tax body.
Kilpi reminds that international corporate tax standards are required to put an end to harmful tax competition for large corporations.
“We need international negotiations similar to the annual climate negotiations,” she states. “If the current downward spiral continues, the average corporate tax percentage will be zero in 2052. We have to put an end to tax competition that is exacerbating inequalities and step up our efforts to combat aggressive tax planning,” says Kilpi.
The Finnish government, the report concludes, seems committed to combatting tax avoidance and increasing transparency on a rhetorical level. A closer examination of its position on many key policy areas, however, demonstrates a tendency to “sometimes prioritise the interests of big corporations over those of broader society”.
The report was co-ordinated by Eurodad, a Brussels-based network of non-governmental organisations from 19 countries in Europe. The section on Finland was produced by KEPA.
Aleksi Teivainen – HT
Photo: Vesa Moilanen – Lehtikuva
Source: Uusi Suomi