Impact of austerity on jobs in tax services and the fight against tax fraud and avoidance in EU-27 + Norway

Report commissioned by EPSU to Labour Research Department, Lionel Fulton, March 2013

Introduction

In November last year EPSU, the European Federation of Public Service Unions, launched a campaign to close the tax gap in Europe. EPSU believes that it is essential to reduce tax evasion and tax avoidance and ensure that governments are able to collect the levels of the tax that have been democratically agreed.

EPSU sees action on tax evasion and avoidance as key to tackling the crisis in public finances, caused by the financial crisis that started in 2007-08, and to promoting fairness in the taxation system so that ordinary individuals are no longer bearing the cost of non-payment by those who cheat and manipulate the system.

The campaign flows from the EPSU tax justice charter (adopted by the EPSU Executive Committee, 2010) alongside its demands for the introduction of a Financial Transactions Tax, a common strategy to increase tax on capital and EU common principles on fair and progressive taxation, and the eradication of tax havens.

In launching this campaign, EPSU has been encouraged by the action that its affiliates across Europe have already taken to draw attention to evasion and avoidance and the need to tackle it. This has included:
-* the campaign Stop Velfærdskronernes Flugt (Stop the Flight of the Money for Welfare) by HK/Stat in Denmark, which combined analysis, political pressure, mass communication and member mobilisation to push for change;
-* the Tax Justice campaign supported by the PCS in the UK, which has highlighted the extent of the tax gap in the UK and the way it is undermining public services and the development of a more equal society, both in the UK and globally;
-* the work of Ver.di in Germany against Steuerflucht (tax flight);
-* the reports from syndicat national Solidaires Finances Publiques in France, which have highlighted the extent of tax evasion and avoidance, beginning in 2008;
-* the document 'Miljarden voor het oprapen' (Billions for the taking) produced by ABVAKABO FNV in the Netherlands to highlight the way that tax was not being collected;
-* the campaigns by FP CGIL in Italy against government policies which favoured those evading taxes at the expense of those that paid them; and
-* the work of Belgian unions, which, as far back as 2007, were calling on the government to reinforce the struggle against tax fraud.

As well as highlighting extent of tax evasion and avoidance, a common feature of almost all these campaigns has been to expose how the resources available to tackle them have been eroded. This is also a central part of the EPSU campaign.

This report reveals how employment in tax offices has been cut in 24 out of 28 states (EU member states plus Norway) in the past four years with the loss of 50,000 jobs already and more cuts to come. It provides examples of the way that those employed in tax administrations can generate substantial amounts of additional revenue, as well as showing where revenue is currently being lost.

It indicates that it is not enough for governments to say that they want to combat tax evasion and avoidance. To do so effectively, they must also provide the resources.

For the full report:

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