Monday

12th Apr 2021

Brussels feels time is right to suggest EU tax

  • Mr Lewandowski: the current EU budget runs from 2007 to 2013 (Photo: ec.europa.eu)

As the economic downturn sees many member states seek ways of cutting back on public spending, the European Commission believes the time is right to put the thorny idea of the EU raising its own taxes back on the table.

EU budget commissioner Janusz Lewandowski told German daily Financial Times Deutschland that the feelings on the idea of an EU tax had changed in national capitals.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"Many countries want to be unburdened. In this way, the door has been opened to think about revenues that are not claimed by finance ministers," he said.

If the EU raised its own taxes, then member states could pay less to the EU from their national budgets is the thinking in Brussels. Member states currently pay towards the EU budget based on gross national income, as well as VAT and customs duties.

However, these sources only make up about 12 percent of EU revenue. "The national credit transfers in 1988 were only 11 percent, now they account for 76 percent of our revenue," said Mr Lewandowski. "That was not the intention of the founding fathers."

"If the EU had more of its own revenues, then transfers from national budgets could be reduced. I hear from several capitals, including important ones like Berlin, that they would like to reduce their contribution," he added.

He indicated that possible tax sources for Brussels could include an aviation tax and a financial transaction tax. Mr Lewandowski also has his eye on the money raised from the auctioning of CO2 emissions rights, something due to start in 2013.

He is to unveil his ideas in September. But although the commissioner senses a change in attitude among some member states, his plans are set to be highly controversial.

Several member states oppose the idea of an EU tax in principle, believing it to resemble too much a state-like power

However, commission officials are said to be counting on a feeling among EU citizens that banks and other financial institutions should pay for sparking off the global financial crisis, meaning that a financial transaction tax with the proceeds going to the EU might be less unpopular than in the past.

There is hope that an ambitious Danish EU presidency in the first half of 2012 could seal a deal, a senior official recently told EUobserver.

The EU has a seven-year budget. The current cycle runs from 2007 to 2013. Negotiations on the budget are traditionally full of ill-humour and sniping between member states.

This next round is set to be worse than usual, with governments already feeling the pinch and other highly controversial issues, such as reform of the budget-gobbling farm policy, also up for discussion.

Luxembourg tax scandal may prompt EU action

An investigation into Luxembourg's tax regime has uncovered how the Italian mafia, the Russian underworld, and billionaires attempt to stash away their wealth. The European Commission has put itself on standby amid suggestions changes to EU law may be needed.

Investigation

Portugal vs Germany clash on EU corporate tax avoidance

Portugal's taking over the EU presidency puts the tax transparency law for corporations - which has been fought over for years - to a vote in the Council of Ministers. The resistance of the German government has failed.

News in Brief

  1. Turkey blames EU for sexist protocol fiasco
  2. France to close elite civil-service academy
  3. Covid-19 cases in UK drop 60%, study finds
  4. White House urges 'calm' after Northern Ireland riots
  5. Italy's Draghi calls Turkey's Erdoğan a 'dictator'
  6. Slovakia told to return Sputnik V amid quality row
  7. EU risks €87bn in stranded fossil fuel assets
  8. Obligatory vaccination not against human rights, European court says

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  2. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance
  3. Nordic Council of MinistersThe Nordic Region can and should play a leading role in Europe’s digital development
  4. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance
  5. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  6. Nordic Council of MinistersWomen benefit in the digitalised labour market

Latest News

  1. The Covid bell tolls for eastern Europe's populists
  2. Four deaths after taking Russian Sputnik V vaccine
  3. Post-Brexit riots flare up in Northern Ireland
  4. Advice on AstraZeneca varies across EU, amid blood clot fears
  5. Greenland election could see halt to rare-earth mining
  6. After 50 years, where do Roma rights stand now?
  7. Why Iran desperately wants a new nuclear deal
  8. Does new EU-ACP deal really 'decolonise' aid?

Join EUobserver

Support quality EU news

Join us