Professor Prem Sikka

Brexit could speed up tax reform in the rest of the European Union according to Professor Prem Sikka from Essex Business School, but there is still a lot of work needed to combat tax evasion internationally.

Speaking ahead of his speech on tax avoidance at a plenary session of the Interparliamentary Conference on Stability, Economic Coordination and Governance in the European Union being held in Bratislava today (Monday 17 October), Professor Sikka said: “The UK has obstructed European Union reforms on tax., so its absence may speed up reform though each member state will try to promote its own preferred policies.”

Professor Sikka argues the European Union needs to do more to make tax systems transparent and enforceable.

He said: “Tax avoidance is not just an economic issue but an issue for social stability and human rights. Without tax revenues no state can function, provide education, healthcare, transport, pensions, alleviate poverty or honour its legal obligations to promote, protect and advance human rights.”

He pointed out that there were a whole range of policies which would open up the tax system to public scrutiny and accountability, while combatting evasion.

He said: “I will talk about some of the things that the states can do on their own such as publishing corporate tax returns, no public contracts for tax avoiders, beefing-up tax enforcement and prosecutions, weakening the tax avoidance industry, changing laws so that companies can’t dump tax liabilities by embracing insolvency, registering of corporate ownership so that we know who benefits from tax dodging, registering of trusts so that we know who benefits, curbs on anonymous companies controlling other companies.

“They can also collectively change the basis on which corporations are taxed, exchange of information freely, blacklist tax havens and stop concealment of state-aid in tax games.”