DUBLIN — Governments will be more likely to back new EU taxes for the bloc’s next seven-year budget if they raise money that national governments are not already collecting, European Council President António Costa said. In an interview with POLITICO, Costa set out for the first time what he gathered from leaders during his tour of 25 capitals on one of the thorniest issues in the talks: how to build support towards new EU levies — known as “own resources” — that would generate fresh revenue to the budget. The answer will help determine whether EU governments can agree on a budget by the end of the year — before 2027's elections in France, Italy, Spain and Poland threaten to derail the talks — without either cutting spending on new priorities or asking national governments to pay more.
For this, we need to have a credible basket of new own resources.” However, some of the options on the table — such as a tobacco tax — are being challenged by governments because they would tap into revenue that is already being collected domestically. Tobacco is already taxed nationally in all EU countries, Costa said, meaning an EU tax could simply reduce national revenue. But newer products such as vapes and e-cigarettes are not taxed in many countries.
If it’s a different thing, “then it’s really new money. Then it means it’s easier [to secure an agreement.]” Costa indicated that some proposals on the table can be "fine-tuned" to address concerns from EU governments. Asked whether that meant making governments “equally unhappy,” Costa replied: “We need to share the unhappiness.” “It’s the only way also to share the happiness of European investment,” he added.
The Irish government, in its role at the helm of the six-month rotating presidency of the Council of the EU, is preparing a new negotiating package for October, based on its assessment of governments’ positions on both spending cuts and new taxes. The Commission’s original proposal, published last year, included five levies estimated to raise more than €60 billion a year. But during the negotiations, governments resisted options they believed would affect them disproportionately.
The most unpopular ideas include a tax on companies operating in Europe known as CORE, opposed by Germany and others, and a mechanism to channel revenue from polluting companies into the EU budget, which Poland and other eastern countries reject. The European Parliament has proposed additional levies on cryptocurrencies, online gambling and large digital companies. The Commission in May produced estimates for each new option.
Costa said a crypto levy had particular potential because national governments do not currently tax the sector. And to have a fair taxation — we should.” But technical questions still need to be resolved, he added. Costa described the digital levy as more complex, with governments divided over both its design and scope.
Extract — continue reading at the source.
