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