Tax dodging causes the EU to lose about 1 trillion euros (US$1.307 trillion) of income each year, the president of the European Council said on Friday as he announced that EU leaders would discuss the issue at a summit next month.
This hemorrhage of tax revenues is equivalent to the entire annual economic output of Spain, and far exceeds the total of about 400 billion euros committed to the bailouts of eurozone member states Greece, Ireland, Portugal and Cyprus.
“We must seize the increased political momentum to address this critical problem,” Herman Van Rompuy, who chairs meetings of EU leaders, said in a statement broadcast on the Internet. “Tax evasion is unfair to citizens who work hard and pay their share of taxes for society to work. It is unfair to companies that pay their taxes, but find it hard to compete because others don’t.”
Van Rompuy’s message, and the addition of the issue to the agenda of the summit in Brussels on May 22, will add to pressure on Austria to conform with the rest of the EU on sharing information about bank depositors.
Austria is the only one of the EU’s 27 member states unwilling to sign up to EU rules on the automatic exchange of depositor data, with the Austrian minister of finance intent on protecting Austria’s long history of banking secrecy.
EU policymakers say having all EU countries signed up to the EU savings directive, the piece of legislation that calls for sharing of depositor data, would help to combat tax evasion.
Luxembourg, which has the biggest banking sector in the EU relative to its GDP, announced this week it was willing to sign up to the directive from January 2015.
The shifting tide has raised alarm in Switzerland, the world’s biggest offshore banking center with US$2 trillion in assets, as well as in Liechtenstein. Liechtenstein Prime Minister Adrian Hasler told Swiss television on Thursday his country was well aware of mounting pressure over the issue.
“The financial center knows that at some point it may go in this direction now that there is a certain momentum in the question,” he said.
EU finance ministers, meeting in Dublin on Friday, discussed the problem, which Germany and the European Commission have said they are determined to tackle so as to close tax avoidance loopholes.
Van Rompuy said about one trillion euros was being lost across the EU each year because of tax evasion and avoidance.
“To give you an idea, one trillion euros is about the same as the entire GDP or total income of Spain, the fifth biggest economy of the European Union,” he said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
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