EU says some states could coordinate green taxes
Date: 24-May-01
Country: BELGIUM
Frits Bolkestein was also sceptical about a proposal by Belgium, which takes over the European Union presidency in July, for a tax to finance the EU budget.
"The route of closer cooperation between sub-groups of like-minded member states should ... be considered where appropriate," the Commission said in its strategy for the EU's future taxation policy.
It suggested that this so-called "enhanced cooperation" approach could be considered in environmental and energy taxation, "where a majority of member states have indicated a strong desire for coordinated action".
The EU executive noted that progress in agreeing tax laws had always been slow because unanimity was required. Once the EU took in new members, this would become even more difficult to achieve, it said in a statement.
Britain, especially, has fiercely resisted attempts to harmonise taxes throughout the EU.
Increased tax coordination would help the EU achieve its goal of becoming the most competitive economy in the world by 2010, the commission said.
"But while a large measure of harmonisation is necessary in the VAT and excises fields, in other tax fields, tax coordination does not imply tax harmonisation," it said.
"A reasonable degree of tax competition within the EU is healthy and should be permitted," it said.
"I am not in favour, and never will be, of any harmonisation of income taxes," Bolkestein told a news conference.
But in the area of indirect taxation, "any way in which we can harmonise or effect a convergence between rates" was positive, he said.
Noting wide divergences between member states' VAT rates, Bolkestein said it would be positive if the EU could have more convergence between VAT rates.
BELGIAN PROPOSAL
Belgium has said it will use its EU presidency in the second half of this year to put the issue of a future EU tax on the agenda for a debate on the future of Europe.
Bolkestein said the European Commission had not discussed the Belgian proposal.
"The (European) Union has of course certain guaranteed ways of getting its income through a slice of VAT, import duties. To add a new tax on to the systems that already exist would take a lot of arguing," he said.
He said he had to have an open mind but Belgian Prime Minister Guy Verhofstadt "will have to convince me because it's not an evident case and needless to say it will be most unpopular in certain member states..."
In its strategy, the Commission said it intended to focus more attention on the tax problems facing individuals and businesses operating within the EU's internal market.
It would soon present options for coordinated action to tackle tax obstacles and inefficiencies in the company tax area.
At present, companies engaged in cross-border business could face problems such as discriminatory tax rules, double taxation, excessive administrative costs and delays in tax refunds.
"While the Commission does not advocate harmonisation of company taxation, there is a need for a certain degree of coordination to resolve these cross-border tax issues," the Commission said.
On vehicle taxation, the Commission said it intended to present a policy document towards the end of this year, dealing with issues such as double payment or non-refund of registration tax paid when private vehicles are moved permanently from one member state to another. The document would also examine the very different levels of vehicle tax in member states.
The Commission will present a report on alcohol taxation later this year, addressing issues such as the proper functioning of the EU's internal market and competition between different categories of alcoholic drinks.
The Commission said it intended to be more pro-active and targeted in taking legal action when it believed member states' tax measures broke EU law.
