UK Minister Denies Giscard's Tax Harmonisation Play

by Jason Gorringe, Tax-News.com, London

15 November 2002

Peter Hain, the UK's representative on the convention drawing up a new constitution for the EU, made it clear in an interview with the Financial Times yesterday that Britain remains opposed to any harmonisation of taxes in the Union.

Hain was speaking after ex-French President Valéry Giscard d'Estaing, Chairman of the convention said that he expected tax harmonisation to be one of the key features of the Constitution, meaning abandonment of the national veto over fiscal change which is held so dear by the UK.

Speaking to the Kangaroo group, an informal body of key industrialists that has always been strongly pro-integration in Europe, Giscard said that a majority of his convention was in favour of harmonisation, allowing the EU to set minimum levels of corporate tax and ensure that value added tax did not diverge greatly from one country to the next. However, it would not affect taxes on personal income, wealth or property.

"There's a strong current in the convention in favour of making certain fiscal questions settled by qualified majority voting," Mr Giscard d'Estaing said. "There's acceptance of a certain harmonisation. I believe that we will propose a solution to move to a system for taxes that are definitely connected with the market."

Peter Hain, who was Minister for Europe until his promotion to the cabinet as Welsh Secretary (a nice comment on UK priorities) said: "I read President Giscard's comments with interest. He's ventilating his personal thoughts on that, as he does on a lot of other matters."

Recommended