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23rd Sep 2018

Slovak minister attacks EU constitution over tax

Institutional changes contained in the EU constitution could increase pressure for EU tax harmonisation, harming all of Europe, Slovak finance minister Ivan Miklos has indicated.

Slovakia is one of 14 countries that have ratified the EU charter, with the centre-right government led by Mikulas Dzurinda supporting it throughout the ratification process.

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But Mr Miklos said on Thursday (3 March) he had changed his mind on the constitution, mainly due to the pressure that the constitution could create towards European tax harmonisation.

"I think that should the institutional changes increase the risk of taking such steps [as tax harmonisation], we need to seriously consider whether it is good for Slovakia as well as for all Europe to carry out those changes," said Mr Miklos, according to TASR, the Slovak press agency.

From this point of view, he added, the adoption of the EU constitution is "not in the interest of Slovakia's further positive economic development or of the EU's competitiveness as such."

Mr Miklos spelled out his ideas at a pre-election campaign debate on Slovakia's future foreign policy, as the country prepares for an early parliamentary election on 17 June.

Sacred cows in Europe?

Slovakia has been one of the strongest opponents of EU tax harmonisation, along with the UK, Ireland and Estonia.

The countries have also expressed concerns over a plan by EU tax commissioner Laszlo Kovacs to propose a common company tax base.

Mr Kovacs told the Financial Times he intends to continue with work on the proposal, aiming to put it forward by 2008.

He said the law would be binding only for countries willing to join in, as part of a so called "enhanced cooperation" agreement while commenting "tax sovereignty is treated in some member states as a kind of sacred cow."

"I know there are four or five countries that are resolutely against [a harmonised corporate tax base]. There is no practical reason for this, or at least I have never heard any concrete arguments for their opposition."

"With all my due respect to tax sovereignty, I believe that competitiveness is at least as important as tax sovereignty, if not more," said Mr Kovacs.

The commissioner argues his plan would save "billions of euros" and reduce the administrative burden faced by companies today.

The commission's plan would also include a proposal to create an EU tax, and Mr Kovacs suggested that such a levy would best be linked to the value added tax raised in the bloc's member states.

"It would offer a better solution for the financing of the EU to have an EU tax because the focus would no longer be on the contribution of the member states but on what kind of EU policies should be financed," he said.

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