Tuesday, 20 November 2012

Commissioner: EU should take control of taxes

EU Commissioner Viviane Reding has said that the EU should take control of taxes from national governments.

Speaking at a debate in Berlin last week, the EU justice commissioner said: "The veto right in the EU council has to be scrapped. Qualified majority voting should be extended to more policy areas, for instance taxation".

Such a move would prevent any single member country, or even minority of countries, blocking Council of Ministers decisions to impose new EU taxes.

Discussion of EU taxes is likely to form part of the EU budget negotiations at a summit of leaders later this week (22-23 November), sold as a way for member states to be 'unburdened' from contributions to the EU budget.

However, the burden of funding the EU would simply be passed to people and businesses directly and, most importantly for many in Brussels, the EU's right to govern and increase those taxes in future would be conceded.

Tax plans

EU taxes have come back on the agenda as a way for the EU to raise more money in "own resources" and bypass the problematic task of requesting ever-increasing amounts of money from national governments.

Member countries currently pay towards the EU budget based on their gross national income, as well as VAT and customs duties.

The EU has already benefited financially from recent rises in VAT, imposed in many of its member countries as part of austerity programmes.

The Commission has also tried to drive through an EU Financial Transactions Tax (FTT) on banks which, due to opposition from a number of governments, is now only set to be adopted by ten member states. Without a veto, the FTT could have been imposed on all EU members by majority voting and particularly threatened the City of London's financial sector if the UK were forced to participate.

Budget Commissioner Janus Lewandowski has also proposed the EU collecting a climate tax on air traffic that would put up the price of holiday flights and expressed interest
in governing other areas of taxation, pressing governments as a first step to agree to co-ordinate the way corporation tax is calculated and to impose minimum rates of fuel taxes on energy bills and road transport, linked to levels of carbon emissions.

Decision time

The right to directly tax businesses and citizens is one of the few powers left exclusively to national governments within the EU. For the EU to gain this power would require a change to the EU treaty, ratified by each member country.

It would be politically impossible for David Cameron to agree to such a change. However, this latest statement by Viviane Reding once again reveals the intentions of those driving the EU to take further fundamental powers from member countries towards becoming a fully-fledged pan-European government.

Advancing EU political integration brings into sharper focus the fundamental decision about Britain's future we must soon make between undiplomatically blocking political union if that is what other EU countries want or letting them go their own way and seeking for ourselves a new, looser, more flexible relationship with our European neighbours that respects democracy.


Read more ...

Summary - Revision of the Energy Taxation Directive

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