Debate: Lessons learnt from the Pandora Papers and other revelations
Date: WEDNESDAY, 14 JUNE 2023
Speaker: Niels Fuglsang
Country: Italy
Language: EN

So the obvious question is what have we learned from the Pandora Papers? Well, the way I see it, we have learned that some people simply refuse to play by the rules, some people at the very top of our society when it comes to wealth and fortune. Colleagues, I have to ask you, did anyone on this floor count on the extent to which this system is rigged? Absolutely rigged. If you look at the Pandora Papers, well you have two systems, not one system but two systems, one applying to the 99 % of people going to work every day, contributing to society, paying their fair share of taxes and another system applying to the top 1 %, those who can, if they wish to, refuse to pay their taxes, refuse to contribute to society because they hire tax advisers to create offshore shell companies and fake trusts where they hide their wealth and hide their fortunes so they don’t contribute and they don’t pay taxes. That has to change. That is what we see in the Pandora Papers that these two systems of rules are applying, that the system is basically rigged.  That is why we have proposed, in this report that we are voting on tomorrow, a number of proposals on how to fix the system. And I hope that we can stand together. I am very proud of the result that we achieved in the committee, where not a single member voted against these proposals. It was a broad majority from left to right, agreeing that we need to do more, and we need some new rules to fix this system.  I would like to highlight three basic proposals that we have. We have a lot of proposals, but among those are, well, one, we need to look at the possibility of having a minimum tax on capital gains. We know that those who have capital gains, those who have stocks, those who have real estate, those who have other forms of capital and earn money from that, that is the people at the very top of our society. And they should also contribute. And they are not always doing that, according to the Pandora Papers, these are the people who are moving this kind of wealth, this kind of capital offshore in shell companies and avoiding contributing. That is why we need a minimum level of capital gains. We need to look at that. We need to have that analysis to see if that’s feasible, because that would be something which would make sure that no country would have 0 % tax on capital gains.  Second, we need to look at the advisory companies, the audit companies that make this show go on. Those who advice on how you can create shell companies and move fortunes overseas. Those companies are often both audit companies and financial advisers, and obviously that’s a conflict of interest. If you first give financial advice on how you can move wealth offshore and then next you ordered the companies or the person’s accounts, you’re not going to find any trouble because you have a conflict of interest, so we propose in this report to separate the audit departments from the financial advice departments.  Third, we need to look at the shell companies and have rules against empty shell companies. That has been proposed by the European Commission, that is being negotiated here in Parliament, we have agreed that we should have these rules, but in the Council among the Member States, they are stuck, they cannot agree on it and we urge the Council to continue the work and agree on rules that will ban the shell companies. That’s what we want in the European Parliament.  I look forward to this debate. We have a lot of proposals and I look forward to hearing from you what we can do and what we have learned from the Pandora Papers.