Flying in the face of development

This study shows that many projects and beneficiaries funded by EIB money involve tax havens and transnational companies that use them for tax purposes.
Tax evasion and avoidance from developing countries represents a significant multiple of global overseas development assistance every year. This leakage is facilitated by tax havens, which provide infrastructure and services to allow secretive transactions.

Plugging tax leaks is needed to help maintain and extend public services, redistribute wealth, restore government policy space and enable developing country citizens to exert accountability on their governments. The promotion of progressive tax systems, the strengthening of tax administrations and the fight against tax and regulatory havens are critical in the area of development finance and must be reflected in European investments in developing countries as part of a coherent European development policy.

The European Investment Bank (EIB), the EU’s house bank whose role in developing countries is increasing, should therefore comply with these commitments and implement clear regulations to prevent tax evasion and foster good governance in tax matters.