A European Parliament working group has reached a "broad agreement" that there is a need for the existing own-resources system which funds the European Union's budget to be replaced by a scheme more understandable to the public, possibly a new tax.
Lord Grenfell from the UK House of Lords, rapporteur for the working group on the 'future financial resources of the Union' told members that a new form of own-resource would have to be "carefully scrutinised," but he said that the subject of a single EU-wide levy should nevertheless "be aired."
Support for an EU tax to fund the bloc's budget has been growing since the eventual agreement between member states on the current seven-year budget last December exposed the system's obvious flaws; at present, the EU budget is funded through a combination of import duties, value added tax revenues and direct contributions from member states - the so-called "Gross National Income resource" which is calculated according to wealth.
Over time, the GNI resource has grown to represent the main source of funding of the EU, with a direct impact on deficit-threatened national budgets, and Jose Manuel Barroso, President of the European Commission, has stated that the EU must find a way of avoiding "such a direct link between national budgets and the European budget."
Barroso has hinted a single tax is the likely road ahead, and idea which has found support amongst the EU's Christian Democrat leaders including Wolfgang Schussel, Austrian chancellor, Edmund Stoiber, Bavaria’s chancellor, and Nicolas Sarkozy, leader of France’s centre-right UMP. However, the issue remains highly contentious as evidenced by the EU Parliamentary committee's "lively debate" on the subject.
"An EU tax can hardly be justified to the citizens at this stage and would certainly not help the cause of the European Union," argued Christian Philip from the French National Assembly.
Others, such as Spanish Senator and former MEP Carles Gasoliba, and Ilias Kallioras of the Greek Parliament, doubted it was ever going to be possible to achieve unanimity in Council on such a far-reaching decision.
"A tax-based system would have to be applied with a proper supra-national fiscal regime, which ensures that EU money is used transparently and managed appropriately," Kallioras observed.
It is also unclear how an EU tax would be raised in the first place, with parliamentarians suggesting a variety of sources including corporate profits, flight levies and a tax on SMS messaging.
A comprehensive review of the EU budget funding mechanism is scheduled to take place in 2008/2009. Commission President Barroso has indicated that no options should be left off of the table when the review takes place, and that the process should be examined "without taboos."
http://www.europarl.europa.eu/news/expert/infopress_page/002-7845-128-05-19-901-20060503IPR07844-08-05-2006-2006-false/default_en.htm http://tax-news.com/newsdb/story/story_update.asp?storyid=22145 http://tax-news.com/newsdb/story/story_update.asp?storyid=23244Tags: Italy | Italy
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