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The fact that yet another British politician has become embroiled in a tax controversy shows the urgency in stepping up the fight against tax havens and pushing through the extensive reforms needed to create tax justice.
The Bahamas Leaks have identified UK Home Secretary Amber Rudd as a former director of two asset-management companies based in the Bahamas. Whether or not she benefitted personally from avoiding any tax, she was none-the-less part of the global tax-avoidance industry. At the very least, it seems a perfectly reasonable expectation that she be completely transparent about the purpose of the directorships and whether she personally profited from them.
After all, people do not generally set up companies in the Bahamas to enjoy its subtropical climate. They do so because it imposes no income, corporate or wealth taxes on individuals investing in offshore companies.
Amber Rudd is not the only politician in the spotlight following the Bahamas leaks. Former EU Commissioner Neelie Kroes is accused of withholding information about her business activities in the Bahamas, something which was an outright breach of her official duties. She is the exact opposite of her replacement today, Margrethe Vestager, who has truly picked up the fight against tax dumping. It was no surprise to find Kroes criticising Vestager for ordering Apple to pay €13bn in back taxes.
Given the repeated revelations and leaks about tax havens, I am pleased to report that of all my political activities in the European Parliament, my work on challenging tax dodging by wealthy individuals and corporations is perhaps the most successful. Greens have been pushing for tax justice on a number of fronts.
We need to fight tax secrecy. Registries of beneficial owners would oblige anyone creating a company to provide publicly available information on who the real beneficiaries are. The European Union is currently revising its anti-money laundering rules and the European Parliament and Member States must take this opportunity to support public registries.
We also need greater pressure for automatic exchange of tax information. The OECD has proposed new international standards but some countries, like Bahamas or Panama, seem to lack the political will to really implement them. The EU should carefully scrutinise the Bahamas while creating its common European blacklist of tax havens, expected for 2017. The European Commission flagged the Bahamas as one of the most problematic countries from a tax haven perspective and Member States must now agree to pressure Bahamas to end its secrecy laws.
Both the Panama Papers and Bahama Leaks emphasise again the central role played by the UK and its overseas territories in the global tax dodging industry. As we head for the exit door from the EU, this is a critical time for the UK. We need to decide what type of society we want post-Brexit. Will we follow the lead taken by the EU in promoting fair taxation or follow the route being pushed by some hard-Brexit supporters to become one of the globe's leading tax havens?
We must ensure that the UK neither supports UK-related tax havens nor adopts more of the features of a tax haven itself in response to any economic problems following Brexit.
Molly Scott Cato is Green MEP for the South West of England. She sits on three committees in the European Parliament: Economics and Monetary Affairs (ECON), Special Committee on Tax (TAXE) and Agriculture and Rural Development Committee (AGRI). She was also recently selected to be part of the European Parliament's committee of inquiry into the Panama papers.