Case: Policy coherence in general

02-02-2010 ECON: Promoting Good Governance in Tax Matters

In February a Report on Promoting Good Governance in Tax Matters by the Committee on Economic and Monetary Affairs, was adopted. Improving tax governance is extremely important for development efforts. Tax revenue has proven to be the most predictable, sustainable and safe source of financing for development. Yet developing countries loose up to seven times the amount of the total development aid in illicit financial flows, tax evasion and avoidance. Leonardo Domenici (S&D), rapporteur of the report, introduces the sense of urgency to promote good governance in tax matters in his draft, but focuses on issues within the EU itself and fails to mention the effect of translucent banking and taxing systems have on developing countries.

Eva Joly (Greens/EFA), Member of European Parliament and chair of the Development Committee, did submit amendments that made the report a lot more sensitive to developing countries. She highlights that tax evasion and avoidance at an international level constitute a serious obstacle to the achievement of the Millennium Development Goals (MDGs). Together with Domenici, she explains that with combating tax evasion and tax avoidance, there will be more finance to achieve the MDGs. She urges the Member States to make the fight against tax havens, tax evasion and illicit capital flight from developing countries their overriding priority (amendment 21).

The amendments of Eva Joly and Leonardo Domenici have made the final report more development friendly. For their efforts to make the tax policies coherent with the development policies, Fair Politics acknowledges them as Fair Politicians.

Monitor fair: Greens/EFA, S&D

Read the ECON Report on Promoting Good Governance in Tax Matters here