The cluster of countries in the Western Balkans included on a so-called “greylist” of tax havens by the European Union deserve to be on Brussels' fully fledged blacklist, a report from charity Oxfam argues.
Albania, Bosnia & Herzegovina, Macedonia, Montenegro and Serbia are all among the 47 countries on the EU’s watchlist of countries that have promised to change their tax rules to meet the bloc’s standards.
This allowed them to escape the EU’s first ever tax haven blacklist, published on December 5, on which Mongolia is the only country from the Eastern Europe and Central Asia region. The blacklist of 17 countries also includes South Korea, Namibia, Panama, Trinidad & Tobago, Bahrain and the United Arab Emirates
The five Western Balkan countries — plus Armenia and Turkey from the wider Eastern Europe and Central Asia region — are all listed on the EU’s report as countries that have said they will take steps to improve their tax laws within the next couple of years, which if fulfilled will allow them to escape future blacklists.
However, Oxfam claims most of the greylist countries shouldn’t be let off the hook. A study from the charity compiled ahead of the release of the EU report argued that at least 35 countries, including the five from the Western Balkans (but not Armenia or Turkey), should have featured on the EU blacklist.
Oxfam’s analysis of taxation regimes finds that all five Western Balkan countries fall short of the criteria on both tax transparency and implementation of anti-BEPS (base erosion and profit shifting) measures.
“The EU has to make sure governments on the grey list follow up on their commitments, or else they must be blacklisted,” commented Aurore Chardonnet, Oxfam EU policy advisor on inequality and tax and one of the authors of the report, in a statement on December 5. “Only a strong blacklist with effective sanctions for the companies and wealthy individuals exploiting tax havens will help end tax dodging.”
Chardonnet also called out the EU, implying hypocrisy in how the standards are applied to third countries but not to countries within its borders. According to the Oxfam report, doing so would see Ireland, Luxembourg, Malta and the Netherlands all included on the list. “As long as tax havens remain at the heart of the EU, it is hard to believe that they will push for further reforms by countries on the ‘grey list’ or agree on strong sanctions,” stressed Chardonnet.