French Parliamentary Report Slams Government’s Anti-Tax Evasion Strategy as “Pathetic”

Recommendations Include Increased Funding, Higher Corporate Earnings Tax, and Stronger Measures Against Tax Havens

  1. Pathetic Anti-Tax Evasion Strategy:

    • A French parliamentary report released on Monday criticizes the government’s current strategy against tax evasion as “pathetic” and recommends allocating more resources to combat fiscal fraud.
    • The report, led by Charlotte Leduc of the left-wing France Insoumise party, deems the results of tax inspections as mediocre and calls for a shift in approach, making the fight against tax evasion a “national priority.”
  2. Inadequate Results and Resources:

    • The report criticizes the anti-fraud plan presented by French officials earlier in the year, stating that the outcomes of tax inspections are subpar, and the allocated staff and resources are insufficient.
    • Leduc contends that out of the €80 to €120 billion owed to the state due to tax evasion, only €15 billion is recovered, emphasizing the need for a more effective strategy.
  3. International Dimension of Fighting Tax Fraud:

    • Highlighting the international aspect of combating tax fraud, the report urges France to lead in “tax diplomacy” and emphasizes the importance of political will in addressing the issue globally.
  4. Recommended Measures:

    • The report recommends raising the minimum tax on corporate earnings to 25%, up from the current 15%, following an international agreement facilitated by the OECD at the end of 2021.
    • Advocates for a parliamentary resolution to ensure France’s support for a European tax of up to 2% on billionaires’ wealth.
    • Calls for a tougher stance on tax havens, stronger measures against “transfer pricing,” and the introduction of a unitary tax on multinationals.
  5. Concerns About Staffing and Technology:

    • Expressing concern over an “alarming decline” in the staff of the French public body managing taxation (Direction générale des Finances publiques), the report stresses the need for adequate staffing.
    • Emphasizes that the development of new technologies, such as data mining, should not undermine human expertise and calls for the creation of a common database for various anti-fraud services.
  6. Lack of Implementation of Previous Recommendations:

    • This is the second annual report on tax evasion by Charlotte Leduc, who leads an “interdisciplinary mission” on the subject.
    • Leduc points out that none of the recommendations from her previous report have been implemented, indicating a need for more decisive action.

The parliamentary report underscores the urgency of addressing tax evasion in France, calling for a more robust and effective strategy, increased funding, and international leadership in combating fiscal fraud.

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