Schroder Back On EU Tax Soapbox

by Ulrika Lomas, Tax-News.com, Brussels

16 April 2002

Speaking on Friday, German Chancellor Gerhard Schroder renewed calls for certain taxes to be levied at an EU level.

In a speech originally intended to address Franco-German relations, he called for thought to be given to proposals to: 'transform the hitherto indirect financing of the European Union into a [form of] financing that is partly direct.'

Mr Schroder, who caused controversy in February by proposing European tax harmonisation, suggested the creation of a more powerful European executive to levy taxes on member nations directly. However, several European countries - most notably the United Kingdom, France, and Ireland - are vehemently opposed to any such moves, and have stated their opinions on numerous occasions.

Indeed, the UK Treasury was noticeably short in a statement released at the time of the German Chancellor's first pronouncements on European tax issues, earlier this year. 'We believe that tax matters are a matter for individual countries. We made this clear at Nice,' the finance department pointed out.

The Irish Tanaiste, Mary Harney, responded in similarly outraged fashion, stating in no uncertain terms that Ireland would never cede tax powers to an outside organisation.

The European Union is currently funded by government contributions and indirect taxes such as VAT.

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