3 May 2010
European Commission to help developing nations fight tax evasion
Business Day online
The European Commission has proposed to Member States a number of actions in support of Millenium Development Goals - including helping developing countries fight tax evaders and reduce the flight of taxable income from their shores.
Poorer countries could then get help to support their tax collection systems to stem “illicit financial flows” that dwarf international development aid, under European Union plans.
Defenses against tax evasion that allow potential revenue to go untapped need to be improved, the European Commission said in draft proposals published today.
“Plugging these tax leaks requires international tax cooperation and making developing countries benefit from international initiatives,” the Brussels-based commission said. The commission is the 27-nation EU’s executive branch.
The Commission says they aim at increasing the level of aid while making aid more efficient and focused on those countries and sectors most in need. To feed into the action plan, the Commission also adopted a Communication on taxation and development which aims at increasing developing countries' domestic revenues through building stronger domestic fiscal systems and fighting tax evasion internationally.
The action plan sets out a possible EU position ahead of the UN Summit on the MDGs this September.
The European Commission has adopted an ambitious action plan for EU action to speed up progress towards the Millennium Development Goals (MDGs). The EU remains the most generous global donor, providing over half of global aid.
The Action Plan also calls for countries to foster ownership of MDGs in developing countries by working in partnerships, such as the EU-Africa Joint Strategy; Ensure that other EU policies such as security, trade, migration, food security and climate change work in coherence for development goals; Mobilise domestic resources through better taxation in developing countries.
In parallel, promote the principles of good governance in tax matters and support fight against tax evasion at international level;
Strengthen regional integration and trade for growth and jobs;
Support initiatives on innovative financing with high revenue potential and ensure they benefit the poorest ;
Use the EU's E2.4bn a year "fast-start" funding commitment in Copenhagen for climate change as a test for aid effectiveness and coherence.
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