The Subcommittee on Tax Matters (FISC) plays a critical role in safeguarding the single market and maintaining the European Union's credibility. Our main objective is to promote fairer and more progressive taxation while addressing tax evasion and avoidance.
Although taxation remains a national competence, multinational corporations operate across borders and often contribute relatively less than small and medium-sized enterprises. EU member states have significantly different tax systems for corporate profits and capital, which creates unfair competition by encouraging wealth transfers to regions with more favourable tax regimes.
This weakens the EU, which lags behind other major global players like the US, China, and India in terms of investment, competitiveness and innovation. To compete globally, the EU must reform its decision-making processes, strengthen its financial policies and adopt bold fiscal reforms. This legislative term is crucial to driving Europe's growth and making the union more effective in serving its citizens.
High earners and large corporations frequently benefit from tax avoidance, shifting profits to tax havens. The Global Tax Evasion Report estimates that rich multinationals and super-corporations could generate up to $4.8tn in offshore profits over the next decade – more than double Italy's annual GDP.
I support a common corporate tax base with a formula to apportion tax based on the real economic activity of multinationals in each country. This would simplify tax filings for companies operating in multiple EU member states, replacing 27 separate tax declarations with one.
Tax avoidance can also be reduced by targeting tax havens. We should establish an EU list of tax havens with stricter criteria, which could include EU countries acting as tax havens. Transparent and efficient tax policies can also help address organised crime and money laundering.
With one per cent of the global population controlling most of the world’s wealth, a global wealth tax is increasingly necessary to counter rising inequality. Since 2020, European billionaires have increased their wealth by one-third, reaching €1.9tn. Wealth taxes could address inequality while raising significant resources. A 2023 Oxfam report estimated that a progressive wealth tax of up to five per cent on multimillionaires and billionaires could raise around €286bn in Europe.
At the G20 finance ministers’ meeting in Rio de Janeiro in July 2024, a tax declaration praised domestic reforms to tackle inequality and promote progressive taxation, encouraging international co-operation on taxing ultra-high-net-worth individuals. Such an initiative needs also to be taken at the EU level.
Public support for fair taxation is strong. A 2023 Ipsos survey in 17 G20 countries revealed that 68 per cent of respondents support a wealth tax on the rich, with only 11 per cent opposed, while 70 per cent favour higher income taxes on the wealthy and 69 per cent support higher taxes on large corporations. Building on the G20 summit, FISC should explore the feasibility of a global minimum tax on billionaires. Ensuring everyone pays their fair share of tax is essential.