Tax evasion costs EU states nearly 825 billion euros annually, according to a study led by the Socialists and Democrats’ group (S&D) in the European Parliament, published last Wednesday. A previous S&D study on the government shortfall due to tax evasion (fraud) and tax avoidance (legal) was widely heard in 2012 and 2013.
The report, signed by British expert Richard Murphy, had then assessed the shortfall due to these practices at 1,000 billion euros, of which 865 billion due to fraud. Then European Council President, the Belgian Herman Van Rompuy, took this into account when he placed the subject for discussion on the Heads of State and Government agenda.
The 2018 report now places the tax evasion figure at 823.5 billion euros, to which should be added between 50 and 190 billion tax avoidance.
The S&D ascribe the tax evasion decline (-11.3%, taking inflation into account) to the 14 laws adopted at the European level, such as the automatic exchange of tax information between countries, directives on the fight against tax evasion, and the creation of a list of tax havens. But greater efforts are necessary.
Calculated on a national scale, the corresponding figure for Belgium would be a loss of 30.4 billion euros, which is more than in the Netherlands (22 billion). Italy would be far ahead with 190.9 billion, while Germany and France would fall respectively to 125.1 billion 117.9 billion.
On Tuesday, the European Greens also released a study on corporation tax rates. It revealed a yawning gap between the expected nominal rates (23% on average in the EU) and the really paid taxes (15% average). Belgium presents one of the widest gaps, with a nominal tax rate of 34% (before the corporate income tax reform) and an effective payment rate of 14%.