Some 200 people rallied outside a courtroom in Luxembourg on Monday as an appeal was opened in the case of two Frenchmen who helped uncover a tax avoidance scheme involving hundreds of multinational companies back in 2014.
The demonstrators who gathered in front of the Palace of Justice in Luxembourg demanded that the whistleblowers’ convictions be overturned, as they waved a banner reading: “Protect whistleblowers – not tax dodgers.”
The two whistleblowers, Raphael Halet and Antoine Deltour, are former employees of PriceWaterhouseCoopers (PwC), one of the Big Four accounting firms that has been helping an array of multinational corporations such as PepsiCo, Deutsche Bank, Apple, Ikea, and Walt Disney set up so-called “tax rulings” or “sweetheart tax deals” in Luxembourg, allowing the companies to save billions of dollars.
The investigation conducted on behalf of the International Consortium of Investigative Journalists (ICIJ) found that over 340 companies had benefited from such schemes from 2002 to 2010. The findings were revealed to the public in November of 2014. “Tax rulings” are legal in Luxembourg , but their contents is kept strictly confidential. Following the scandal, which exposed Luxembourg as a “tax haven,” charges were leveled against Halet, Deltour, and former France 2 television reporter Edouard Perrin for leaking the information.
In June of this year, Halet was given a nine-month suspended sentence and ordered to pay a €1,000 fine, while Deltour was handed a suspended sentence of 12 months, as well as a €1,500 fine. The former PwC employees were found to have violated secrecy laws when they acquired and disclosed confidential tax files. Perrin was found not guilty of all charges at the time. However, in August, the public prosecutor launched an appeal of his acquittal.
Leaving the court on Monday, Halet praised his supporters for standing up for the cause, despite the fact that the issue is rather unexciting and complex.
“Moving so many people for a topic so boring, there is no other word!” he exclaimed, while observing that the steadfast support for his battle against tax dodgers proves that “tax justice concerns more people than we think,” according to broadcaster France Bleu.
“It is extremely encouraging, and I am very grateful to these supporters,” Deltour said.
The whistleblowers’ trial has sparked a new debate about how to protect those who leak confidential information exposing government irregularities for the public good.
Speaking to RT on November 15 ahead of the trial, Halet said that it was essential to create an unambiguous international mechanism that will shield whistleblowers from unfair treatment and “save them from scandals being created around them thanks to the media.”
“It is absolutely necessary to have organizations on the international and European levels to gather information from whistleblowers and decide whether it harms public interests,” Halet said, stressing that it’s high time that such a tool was devised, as, at present, whistleblowers are left “under enormous media pressure.”
Oliver Pearce, a tax policy manager from Oxfam, which is an international group of charitable organizations focused on eliminating poverty, said that, by cutting sweetheart deals with big corporations, governments ultimately contribute to the poverty of their citizens, while stressing that the companies themselves should understand that they must contribute to the communities in which they operate.
“It is important that governments recognize it when companies avoid taxes, and when we have increasingly lower tax rates for companies that we need to make up the revenue that we all rely on from public services,” he said, adding that companies should be forced to feel “a moral responsibility” to pay taxes.
In the end, lower corporate tax rates and tax avoidance are detrimental to society, as they contribute to global poverty, Pearce argued.
A recent report from the European Network on Debt and Development (Eurodad) found that the practice of lowering corporate taxes and turning a blind eye to tax avoidance is rife in the EU. In 2015 alone, Luxembourg struck 172 tax deals, according to the report. Meanwhile, the monitor in the EU noted “an increase of over160 percent between 2013 and 2015” in the number of sweetheart deals for corporations, which reached 1,444 in 2015, the report said. Notably, the most significant spikes were seen in Belgium and Luxembourg, where the numbers rose by 248 and 50 percent, respectively.