EU blacklist was introduced in 2017 mainly aiming at countries with big businesses not paying taxes. The non-tax-paying counties often have big businesses that get away without paying their fair share of taxes. This comes as a big disadvantage to people of countries who have to pay huge taxes for their resources.
Such policies of the government make the rich richer and poor poorer. This again becomes very problematic for people
In 2017 the EU released the blacklist of tax havens. It also released a list of greylist countries that qualified for tax heaven but promised reforms. As said by Eugen Teodorovici, minister of public finance of Romania ‘these blacklists are made to bring positive change and encourage cooperation.’
The blacklist was made as an action against tax havens as these were operation at the cost of the already suffering regions.
What happens to countries on the blacklist?
The biggest disadvantage that blacklist countries face is the dent in their reputation. Others include sanctions from individuals and other member states.
What happens to countries on the grey list?
The countries that are on the grey list are closely monitored by the EU. If they fail to fulfill the commitments that they had made they will be added in the blacklist.
What has happened since their release?
Since the list of grey and blacklist, the lists have released the grey list has increased with the decrease in the blacklist. More transparency is asked from the EU as well as the tax heaven states to monitor their functionality.
But since 12 March 2019 10 more countries have been added to the list-making order to not spare any countries from being a tax haven.
Samoa,
Trinidad and Tobago
American Samoa
Guam and
the U.S. Virgin Islands
were among the original five countries that were a part of the blacklist. 10 more have been added to the list that includes
Aruba
Barbados
Belize
Bermuda
Dominica
Fiji
Marshall Islands
Oman
United Arab Emirates
Vanuatu
The 10 countries that are newly added are either because of not committing to adopting new reforms in the state to get out of the black-list or being on the grey list but were unable to have any reform in the given year’s time.
The above list if for the tax havens only and while the EU is taken such precautions against tax heaven there is plenty of other things that have to be taken care of as well. These include the EU sanctioned list.
While countries like Belarus, Afganistan and Burundi and many others have restrictive measures against them in order to benefit the citizens of their as well as other countries.
For the full list and the restrictive measures refer here.
Although these restrictions have been made for the good of their own citizens, these have come with their own criticism.
For the grey list countries to come out of the list factors like transparency, information exchange standards, signed bilateral agreement for exchange, fair tax competition, no harmful tax regimes/practices, and the implementation of standards through country reporting are considered.
