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On 26 April, I attended a lunch debate organised by the Foundation for European Progressive Studies (FEPS) on how to make European Union taxation fairer and more progressive.

Decision-makers and academics engaged in a thorough debate and several interesting points were raised during discussions.

Three EU wide overlapping trends were identified by discussants as distinctive of recent years.

Firstly, we have seen an increase in regressive forms of taxation, such as the Value Added Tax (VAT), following recommendations coming from the EU institutions and the needs of Member States to improve their budgetary situation.

Secondly, inefficient property taxation and unpopular inheritance taxes have become less able to countervail growing inequalities and the accumulation of wealth among the richest in society.

Thirdly, it has become more difficult to tax business profits, especially for multinationals and digital platforms, as recently showed by the Panama Papers scandal.

These trends pose systemic risks to our societies as billions of euros go missing every year, at a time when public budgets are very much under strain. That is why both the Organisation for Economic Co-operation and Development (OECD), with its BEPS project, and the European Commission, with its January Anti-Tax Avoidance Package, have started working on this issue.

All the interventions agreed on the fact that a rethinking of our tax systems is urgently needed to reinforce the efficiency and effectiveness of revenue collection and to increase transparency, fight tax fraud and evasion and increase fairness, progressivity and redistribution capacity of taxation.

They also agreed that this will require much more profound reforms than existing proposals to increase corporate tax transparency and improve country-by-country reporting, including institutional innovations such as the set-up of an EU tax authority.

However, another key aspect should be taken into account when looking at this problem.

When presenting its package of measures on taxation last January, the Commission provided evidence that estimates corporate avoidance at about €50-70 billion a year in the EU.

These figure do not only call for a rethinking and reform of Member States’ tax systems; they also raise doubts about the necessity of austerity, which is largely unjustified if so much money can be collected through ending policies that allow tax avoidance and evasion by multinational companies and billionaires.

We all know that one of the first victims of austerity has been social protection systems and services, both of which have suffered drastic cuts in recent years, at a time when they were needed the most.

Linking the two trends concerning the weaknesses in our taxation systems and the underfinancing of social policies and services is fundamental; reinforcing the efficiency and effectiveness of revenue collection will be a vital tool to achieve adequate investment in social policies and services.