On July 3rd the Directorate-General for Taxation and Customs Union of the European Commission held an event marking the launch of the EU’s Annual Report on Taxation 2023. Annette Alstadsæter, director of Skatteforsk – Centre for Tax Research, participated in one of the panels.
During the event, the 2023 Annual Report on Taxation was presented and a series of panels with tax experts followed. The different panelists provided their opinions about how tax systems in the EU are faring and discussed tax policy actions that could support economic recovery in a fair way while ensuring fiscal resilience in the future as we move out of multiple crises.
The last panel of the event “Progress and challenges in estimating tax abuse and optimizing tax collection for tax administrations” looked into how tax administrations can improve the way they estimate tax compliance and consequently tax collection. The panel was a big success, with around 750 online viewers from many countries in addition to the on-site audience.
Simon Loretz, from the Austrian Institute of Economic Research, opened the panel discussion giving a picture of the current “global megatrends” affecting tax systems – the COVID-19 pandemic and the Russian invasion of Ukraine. Such megatrends were defined as game changers for tax administrations and big challenges for fighting tax evasion and avoidance. Even though it is still hard to know the real size of tax evasion and avoidance, Loretz commended the increase in investigation and tracking over time of this phenomenon; something that has allowed researched and policy makers to identify that these are actions mainly found among the wealthiest corporations and individuals.
Alstadsæter opened her intervention with a reminder about the need to measure the efficiency of the tools been used by tax administrations to reduce tax evasion and avoidance, since these tools ultimately become a cost to regular taxpayers. There is a need for more comparable data between countries and over time to measure for instance effectiveness of the recent automatic exchange of information across countries (the Common Reporting Standard of the OECD) and to track the rise of potential new evasion channels, as demonstrated, for example, by real estate wealth hidden in Dubai. Alstadsæter encouraged the EU Commission to play a bigger role in establish minimum standards for tax related data collection and sharing. She also emphasized the need for more guidance concerning public sector implementation the GDPR framework, which often is interpreted in an unnecessarily restrictive manner by local legal departments in various national agencies, hindering innovation, automatization, and effective use of public resources.
During his concluding remarks, Michael Roekarts from the Belgian Federal Public Service Finance, made a call to policy makers to not limit their efforts to calculating the amount of revenue lost due to tax evasion and avoidance but to give tax administration the necessary tools to enforce and collect those debts. Something which has become increasingly challenging due to the continuous reduction in tax administrations’ budgets and workforce.
An important new tool in providing new country-by-country estimates and policy parameters is the forthcoming new website Atlas of Global Tax Avoidance by the EU Tax Observatory and in collaboration with Skatteforsk – Centre for Tax Research, which will be launched in Paris on October 23, 2023, and in Stavanger on October 25, 2023. If you are interested in learning more about this topic, remember to subscribe to our newsletter and follow our social media.