At the heart of the intensifying debate about fairness and inequality is tax. Who can think without shuddering of the opportunity costs incurred by needy economies robbed of the tax to which they are entitled? In that context, and against the backdrop of exposure exercises such as the Paradise Papers, there was understandable enthusiasm for the European Union’s latest list of uncooperative tax havens. It arrived this week, amid much ballyhoo and talk of toughness. What a disappointment.

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The EU put 17 extra-EU jurisdictions on a blacklist: American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, St Lucia, Samoa, Trinidad and Tobago, Tunisia and the United Arab Emirates. They could lose access to EU funds and incur sanctions soon to be announced. But contrast the list with what we know was revealed about international tax avoidance by both the Paradise and Panama Papers.

The EU seems to have targeted countries with little economic, military or diplomatic weight. The list includes Panama, which was central to the Panama Papers, but not Bermuda, which was central to the Paradise Papers. In imperialist mode, the EU paints a picture that broadly says that “those over there” in low-income countries, at the periphery of the global economy, are a source of the world’s economic problems and should face sanctions. The blacklist does not include any western country, even though accountants, lawyers, banks and much of the infrastructure that lubricates global tax avoidance are located in the west. Also excluded are UK crown dependencies and overseas territories, which have undermined the tax base of other countries for decades.

Another 47 jurisdictions are included in a “greylist”: these are not compliant with the standards demanded by the EU, but have given commitments to change their rules. This list includes Andorra, Belize, Bermuda, the Cayman Islands, Guernsey, the Isle of Man, Jersey, Liechtenstein, San Marino and Switzerland. But even that is deficient. And Luxembourg is missing altogether.

Where is the UK on either list? It offers special tax arrangements to non-domiciled billionaires that are not available to British citizens. We are deeply complicit. The UK has long enabled large companies and accountancy firms to write favourable tax laws, and has entered into sweetheart deals with major corporations

The UK has long enabled accountancy firms to write favourable tax laws, and entered into sweetheart deals

The issue of tax avoidance is not going away. Corporations and wealthy elites are addicted to it. And many of the tax havens, as comparatively small countries, are not readily going to dilute their practices, as a decent standard of living cannot easily be provided by seasonal tourism, agriculture and fishing.

But the EU blacklist is a wasted opportunity because there are things the international community can do. Tax havens should, for example, be offered favourable financial grants by the EU and other countries to rebuild their economies and become hubs for new industries, and research and development. Grants should be conditional on step-by-step progress towards meeting specified benchmarks on transparency, accountability and cooperation, including a publicly available register of beneficial ownership of all companies and trusts, and a list of the assets held by wealthy individuals. Havens would need to commit to automatic exchange of information with other countries on any matter relating to tax or illicit financial flows.

The accounts of corporations and limited liability partnerships holed up in tax havens should also be made public. At the very least, the EU and the UK should insist that the public accountability mechanisms in tax havens match those on mainland Europe.

As for jurisdictions that reject reform, they should face sanctions. The imposition of a withholding tax, of say 20%, on all interest and dividend payments to individuals and companies would reduce their attractiveness. Labour’s 2017 manifesto contained that idea.

The EU, the UK and other countries could also ensure that no individual or company under their jurisdiction would be able to import or export any goods or services from designated tax havens. The UK is being asked to pay a fee to secure access to EU markets after Brexit; by the same logic, a fee should be demanded from tax havens in the shape of better transparency and accountability. Persistently aggressive jurisdictions might suffer travel and visa restrictions, or be denied the use of international satellites that tax havens rely on for communications and financial transactions.

These ideas, and there are others, may not curb the predatory practices of tax havens overnight, but any or all would give the sponsors and users of these territories considerable food for thought. Action is often promised, but how many weak governments have sought refuge behind the claim that global tax avoidance requires international solutions, while at the same time undermining possibilities of international solutions? Too many.

We cannot afford to go on like this. Be brave and follow the money.

• Prem Sikka is professor of accounting at Sheffield University