Banks in exile: how Europe's big banks profit from tax havens

News Mondays - Léa Farine

Visit report published by Oxfam, the global anti-poverty movement, highlights the massive tax evasion practiced by major European banks. This information is not difficult to obtain. Indeed, since the last financial crisis, a measure known as «public country-by-country reporting» has been adopted by the countries of the European Union. Its aim is «to make banks more transparent and accountable to the public for their activities».

It states, for example, that «the 20 largest European banks declared 1 euro out of 4 of their profits in tax havens, a total of 25 billion euros in 2015». The consequence is: «European banks did not pay a single euro in tax on 383 million in profits in tax havens in 2015.» For governments, this shortfall has to be made up, for example by increasing value-added tax, which directly affects the poorest sections of the population.

Tax evasion is not illegal. If we consider that the sole function of banks, and companies in general, is to generate profits, it's even normal that they do everything in their power to achieve this. But multinationals are not «empty shells». It's always worth remembering that banks thrive on the money invested by citizens, and companies can't grow if no one buys the products or services they offer. This is why public information, made available through reports such as the one by Oxfam, is so valuable. If we know that a particular bank practises tax evasion, and to what degree, we are free, according to our own ethical considerations, to boycott it by placing our money elsewhere, or to commit ourselves politically, either concretely or by voting, to greater state constraints.

While reporting is mandatory for banks, it is not for all companies. According to Oxfam, «if we want to combat tax evasion effectively, the European Union must ensure that these transparency obligations are extended to all major companies, for all their countries of activity and without exception! Transparency and information enable freedom of choice, the essential foundation of a fair and truly democratic society. It's then up to us to take account of this information or not, to act or not... With full knowledge of the facts, this time.

Write to the author : leafarine@gmail.com

Photo credit: © Oxfam France