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Shell companies cost EU budgets 200 billion a year – Carthy

27 April, 2017 - by Matt Carthy MEP

Sinn Féin MEP Matt Carthy has reacted to a new report showing that the types of schemes revealed in the Panama Papers cost the budgets of EU member states up to 237 billion euro per year. The report, commissioned by the European Parliament’s Panama Papers inquiry committee, was presented at a hearing of the committee today in Brussels.

Carthy said: “These findings show the high cost to governments across the EU of permitting these schemes that funnel money offshore. The schemes directly and very significantly reduce the amount of funds available to state authorities for spending on public services.

“The report estimates that the schemes revealed in the Panama Papers cost the budgets of EU member states somewhere between 109 billion euro and 237 billion every year.

“This is money that should be received by governments as revenue and then made available to fund vital public services like hospitals and schools.

“The report looks at just one example of what these funds could be used for if it wasn’t diverted to offshore tax havens – employment. The billions funnelled out of EU member states and into tax havens could be used to support an additional 3.5 million jobs, at a time when we still have 20 million people out of work across the EU.”

Carthy questioned the report’s author’s on whether there could ever be any legitimate reason for the use of shell companies, arguing that even those shell companies created for ‘legal purposes’ were used solely for tax avoidance by individuals, groups and corporations.

“Shell companies are at the heart of the offshore scam. These findings show that we need to take transparency seriously and we need to act urgently to stop money that should be spent on healthcare and education from being diverted into tax havens. We need to put in place public registers of the beneficial owners, or true owners, of companies in each state and ensure that corporations publicly report their earnings and tax paid in each country,” he said.

Today’s hearing followed a two-conference organised by Carthy together with fellow MEPs in the European United Left (GUE/NGL) group in Brussels to mark the one-year anniversary of the publication of the Panama Papers. The conference featured international tax justice activists including Professor Richard Murphy from City University London, representatives from Oxfam and the Tax Justice Network, and political representatives from Ecuador and Bolivia. ENDS

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