Tax avoidance is eating big holes into our budget - 190 billion euros every single year - money we urgently need to finance the just transition to a sustainable and social future. In recent years, the effective tax rates of big digitalised companies have sharply dropped and have now hit the all-time low of 9.5%, while SMEs and the like pay around 23%. The escalating race to the bottom needs to be stopped if we do not want corporate taxes to hit the bottom at people’s expense.

Plastic and kerosene are not taxed as they should be, even though they poison our soil, water and air. Businesses transfer production to countries with lower emission standards and then import the goods. Globally, the richest pollute 17 times more than the poorest, but don’t shoulder their fair share of the costs. Our tax policies lag behind and even undermine our battle against the climate emergency.

In a world of multinationals and global flows of money, countries acting on their own have lost the capacity to impose rules. Yet, when it comes to tax justice, the EU all too often does not even have the right to act. Also, tax rules must be decided by all 27 EU members, allowing individual member states to block tax justice initiatives, like harmonisation of rules or a digital tax, out of short-sighted self-interest.

LuxLeaks, SwissLeaks and the Panama Papers revealed a broken tax system where big corporations and rich individuals are getting away with exploiting legal loopholes, shopping around for the most favourable jurisdictions and hiding money in offshore tax dumping locations. These dodgy practices are creating vast inequalities in our societies and draining the public purse.