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BackThis week, the European Parliament debated in its special committee on the future of the EU budget from 2014 the revenue side of the EU budget. Janusz Lewandowski, commissioner for financial programming and budget, who had been invited, remained disappointingly vague. Replying to a comment by an MEP that the commissioner had in reality hardly said anything in his 10-minute statement, Lewandowski himself admitted that this statement was not too far from reality. In the end the budget commissioner gave a little hint in favour of taxing the financial sector. However, unfortunately not (yet) in respect of a Financial Transaction Tax.
In a Communication published last year on reviewing the EU budget, the Commission cited six different options as a new source of income: according to this, taxing the financial sector, revenue from the Emissions Trading System, an aviation tax, a value added tax, an energy tax or a corporation tax - all at EU level, would be worth considering to finance the EU budget. Lewandowski does not want to anticipate the publication on the future EU budget from 2014, in which the Commission will state its preferences.
However, Lewandowski is not happy with the current artificial value added tax system as an own resource. It was not transparent enough. A new own resources system had to be politically feasible, argued the budget commissioner.
In their contributions, several MEPs emphasised that the rebate system for some countries - primarily Great Britain - had to come to an end. The Social Democrat MEP Gardiazábal Rubial urged Lewandowski to consider the Financial Transaction Tax as an option to create extra revenue for the EU budget. The MEP was supported by Miguel Portas of the European Left, who is also in favour of a Financial Transaction. The MEPs Carl Haglund (European Liberals) and Jean-Luc Dehaene (European People's Party) supported the budget commissioner in his view that the current artificial construction of own VAT resources should be revised.
Commissioner Lewandowski is in favour of revenue neutrality for the planned new revenue system, which means that the EU budget should not be increased. The taxation of the financial sector has already been reviewed and was generally feasible. However, with regard to the Financial Transaction Tax one had to clarify among others, what this tax would be based on - should it refer to foreign exchange transactions, to securities transactions or other transactions? A background analysis would help to show what is feasible and what is not. One should in particular mention the Financial Activity Tax, which companies active in the financial sector would have to pay. He regards this option as a very serious alternative. According to Lewandowski, Think tanks in Brussels opt for European Value Added Tax as a possible source of income.
The Commission will announce its proposal on the EU Budget from 2010 probably in three months’ time. Only then the secret might be lifted, whether respectively which changes the Commission intends to make with regard to the revenue system for the EU budget. However, in the end the decision will be with the finance ministers of the EU 27, whether or which changes will be made to the own resources system.
However, Lewandowski is not happy with the current artificial value added tax system as an own resource. It was not transparent enough. A new own resources system had to be politically feasible, argued the budget commissioner.
In their contributions, several MEPs emphasised that the rebate system for some countries - primarily Great Britain - had to come to an end. The Social Democrat MEP Gardiazábal Rubial urged Lewandowski to consider the Financial Transaction Tax as an option to create extra revenue for the EU budget. The MEP was supported by Miguel Portas of the European Left, who is also in favour of a Financial Transaction. The MEPs Carl Haglund (European Liberals) and Jean-Luc Dehaene (European People's Party) supported the budget commissioner in his view that the current artificial construction of own VAT resources should be revised.
Commissioner Lewandowski is in favour of revenue neutrality for the planned new revenue system, which means that the EU budget should not be increased. The taxation of the financial sector has already been reviewed and was generally feasible. However, with regard to the Financial Transaction Tax one had to clarify among others, what this tax would be based on - should it refer to foreign exchange transactions, to securities transactions or other transactions? A background analysis would help to show what is feasible and what is not. One should in particular mention the Financial Activity Tax, which companies active in the financial sector would have to pay. He regards this option as a very serious alternative. According to Lewandowski, Think tanks in Brussels opt for European Value Added Tax as a possible source of income.
The Commission will announce its proposal on the EU Budget from 2010 probably in three months’ time. Only then the secret might be lifted, whether respectively which changes the Commission intends to make with regard to the revenue system for the EU budget. However, in the end the decision will be with the finance ministers of the EU 27, whether or which changes will be made to the own resources system.