Dutch minister shoots EU and tax havens
Dutch Finance Minister Wopke Hoekstra is expected to apologize for an EU decision on tax havens after being named in the “Pandora Papers” revelations, a prominent MEP said.
EU finance ministers are due to approve an updated blacklist of shady tax havens on Tuesday 5 October.
But a financial documents leak on Sunday linked 27 European politicians, including Hoekstra, to secret foreign holdings.
And for Paul Tang, a center-left Dutch MEP who chairs the European Parliament’s tax committee, that meant Hoekstra had to symbolically stay out of the EU’s decision on tax havens.
“Global elites continue to use tax havens to hide their money,” Tang tweeted on Monday.
“Hoekstra, which had investments in the British Virgin Islands (BVI), should apologize for the move,” Tang added.
The Pandora Papers leak showed that Hoekstra, a former McKinsey partner, had invested € 26,500 in safari parks in Kenya and Tanzania through Candace Management in 2009, an offshore company incorporated in BVI, a British protectorate in the Caribbean. .
Hoekstra, who entered politics shortly after, finally sold his stake in the company a week before becoming minister in 2017, reportedly told the park owner: “I have to get rid of it, now.”
He also took to Twitter, saying he was unaware the company was based in the BVI and that he had donated the profits to a cancer charity.
He did not report the transaction at the time because “he did not have to,” he said.
But even though Hoekstra didn’t break any laws, his exposure to the Pandora Papers case made him a lightning rod for reform.
“Even if it is allowed, it is not desirable. It is mainly about what is socially acceptable,” Leen Paape, professor of corporate governance at Neyenrode University in the Netherlands, told About the conduct of Hoekstra.
“It is scandalous that some of the politicians who claimed to suppress secret shell companies were using them themselves,” Tove Ryding of Eurodad, a pro-tax NGO based in Brussels, told EUobserver.
“This shows that the reports already announcing the end of tax havens are greatly exaggerated,” she added.
“In the Netherlands, the defense is always that everyone does it, and it is not prohibited (…) it is a naive representation of the facts,” Tang, the MEP, also told a Dutch newspaper.
He said the “Italian mafia” used financial tricks similar to Hoekstra’s.
And he noted that Germany has much stricter tax laws than the Netherlands.
“Strong reforms are needed, from tomorrow when EU finance ministers discuss the list,” Tang also tweeted on Monday, saying the current blacklist of EU tax havens was “completely inadequate “.
The list excludes known tax havens such as Ireland, the City of London and British BVI-type protectorates, Luxembourg, Malta, the Netherlands and Switzerland, among others.
“While the list can be a good tool, member states forgot something in composing it: real tax havens,” Tang wrote in a statement earlier in January.
“We have to look at ourselves in the mirror. EU countries are responsible for 36% of tax havens,” he said.
“By refusing to properly fight tax evasion, EU governments are betraying their citizens to the tune of more than 140 billion euros,” he noted.
And according to a 2017 study, neighboring member states lose around € 19 billion in tax revenue per year due to corporate tax evasion facilitated by the Netherlands alone.
The Pandora Papers leak consisted of nearly 2.94 terabytes of data, the largest in history.
Other names of EU politicians in the revelations were Czech billionaire prime minister Andrej Babiš and Cypriot President Nicos Anastasiades
And for his part, Spanish Green MEP Ernest Urtasun called on the European Commission to initiate infringement proceedings against Member States which have not “correctly transposed the rules against money laundering and administrative cooperation”.
He also called for a parliamentary debate on Pandora’s papers during the plenary session in Strasbourg this week.