Estonian PM Hits Back At France Over Corporate Tax Pressure

by Ulrika Lomas, for LawAndTax-News.com, Brussels

01 October 2004

Speaking to an audience of students and diplomats at the College of Europe in Warsaw on Wednesday, Estonian Prime Minister Juhan Parts hit back over the French government's suggestion that the lower-taxing new EU member states should lose their EU regional funding if they do not agree to increase their corporate tax rates.

Condemning remarks made to that effect recently by French Finance Minister Nicolas Sarkozy as "not according to European values", Mr Parts observed that:

"Companies are always looking for the best opportunities. I would say that it is better that they stay in the EU than move to Asia."

He also took the opportunity to address the implication that the newer members of the European Union are too poor to afford low tax rates, arguing that:

"Business-friendly tax rates produce more growth and thus more revenues for the public sector."

According to the EU Observer news service, the Estonian PM went on to predict that Europe-wide tax harmonisation, as proposed by Germany and France, would undermine national democracy, suggesting that:

"If national governments cannot even decide over taxes anymore, citizens will start to question what is the point of going to vote in elections."

Recommended