Belgian Finance Minister Wants European Union To Levy Direct Taxes

by Ulrika Lomas, Tax-news.com, Brussels

07 May 2001

In a debate over Europe's future at the Brussels Economic Forum last week, Belgium's finance minister, Didier Reynders, suggested that the European Union should levy a direct tax on its citizens to help fund its annual budget expenses.

In July it will be the turn of Belgium to assume the presidency of the EU for the ensuing six months. Reynders has declared that the issue will be discussed formally amongst EU leaders in connection to enlargement and other structural and political issues during the December summit in Laeken.

The minister said his proposal was in the context of 'defining a new budgetary framework over the medium term [which] could lead to discussions on the expediency of a European tax to finance at least part of the union and its policies.' He claimed that it was not meant to be a 'precise measure but a reflection about the future of the EU.'

He added that it was 'normal' for the EU to consider a 'new level of taxation' to help sustain its finances and although he was vague on the type of tax under consideration he indicated that value added tax could be an appropriate vehicle for generating the extra revenue.

But EU tax payers need not worry just yet as Mr Reynders said that proposals on the new tax due to be made at the Laeken summit will then be debated in the European Parliament and at several national assemblies over the next two years. It won't be until the Summit in December, 2004, that the next EU treaty will be finalised.

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