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France must beef up fight against tax evasion: report

Bank notes lie on a French flag, April 7, 2022.
Bank notes lie on a French flag, April 7, 2022. Copyright Joan Mateu Parra/AP.
Copyright Joan Mateu Parra/AP.
By Euronews with AFP
Published on Updated
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A French parliamentary report published on Monday recommends that more money should go towards fighting tax evasion, calling the current government strategy “pathetic”.

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“The results of tax inspections remain mediocre, and the staff and resources allocated to this task are still inadequate", says the report, criticising the anti-fraud plan presented by French officials earlier this year.

Charlotte Leduc, an MP from the left-wing France Insoumise party who is leading the investigation, says the current approach is made up of “pathetic measures” and argues that tackling fiscal fraud must become a "national priority".

On Twitter, she wrote that out of the €80 to €120 billion owed to the state because of tax evasion, officials are only able to recover €15 billion.

Charlotte Leduc criticises the DGFiP public tax department on Twitter. "I can't let you say that the DGFiP's services are inefficient". "Well, yes... once again we are getting back 15 billion out of 80 to 120 billion. That's between 12.5 and 18.75% of the total tax evasion cost."

There is no official estimate of the amount of tax fraud happening in France but the government launched a Fraud Assessment Council in October, tasked with analysing the phenomenon.

Leduc’s report, which highlights the international dimension of fighting tax fraud, calls on France to be at the forefront of "tax diplomacy", referring to this as "a question of political will".

The document recommends an increase in the minimum tax on corporate earnings to 25% (compared with 15% at present).

This 15% rate is gradually being rolled out across the world following the conclusion of an international agreement presided over by the OECD at the end of 2021.

Regarding the wealth of billionaires, the report calls for a parliamentary resolution to guarantee France’s support for a European tax of up to 2%.

It also advocates for a tougher stance on tax havens and tougher measures against "transfer pricing", cross-border transactions between subsidiaries of multinationals designed to seemingly reduce profits and avoid tax.

It equally recommends the introduction of a unitary tax on multinationals.

On top of this, the report is concerned about an "alarming decline" in the number of staff in the French public body that manages taxation, known as the Direction générale des Finances publiques (DGFiP).

This figure will unfortunately not be offset by the government’s promise to create 1,500 additional posts between now and 2027, according to Leduc’s findings.

The development of new technologies such as data mining (mass data processing) "must not be to the detriment of strengthening human expertise", the report continues, stressing that it is also necessary to create a common database for the various anti-fraud services.

This is the second annual report on tax evasion written by Charlotte Leduc, who is in charge of an "interdisciplinary mission" on the subject.

None of the recommendations contained in her previous report have been implemented, she points out.

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