Smaller states could suffer if EU raises cash from harmonised tax – Sant

Labour MEP says proposal to expand EU revenues from financial transactions tax and common corporate tax 

Labour MEP Alfred Sant
Labour MEP Alfred Sant

Labour MEP Alfred Sant has voted against a European Parliament report on the system of Own Resources of the European Union, because it includes proposals for new EU-level taxes such as the Financial Transaction Tax and the Common Consolidated Corporate Tax Base. 

The revision of the way the EU raises money is part of the upcoming budget talks for the seven-year Multiannual Financial Framework. 

The need to raise more cash has acquired growing relevance in the wake of the COVID-19 pandemic and its consequences for the EU economy.  

The European Parliament is also demanding to use all revenues generated by the future implementation of new own resources, primarily for the repayment scheme of the Recovery Plan for Europe. 

In an explanation of his vote, Sant acknowledged that in the current economic situation the EU needs lots more money to spend and a revision of the EU’s current system of own resources is therefore inevitable.  

“Proposals reflecting EU objectives acknowledged by all, such as the plastic levy agreed upon at Council level, are extremely fit for purpose. Nevertheless, other proposals in the text have been advanced with a regrettable disregard for the damage they would inflict on the economy of individual Member States,” Sant said. 

“The problem is that mostly, the smaller to smallest member states are affected. Were it otherwise, and the interests of the larger states were involved, the approach would be much more cautious.” 

Sant said the questions as to whether own resources is the best response to the EU’s crying need for more funds to carry out its mission, and as to how new own resources should be identified, merit an urgent revisit. 

MEPs have fast-tracked and voted already during the September plenary session on their legislative opinion on the Own Resources Decision (ORD). This removes an important barrier and speeds up the procedure to implement the key EU law to restart the economy, allowing the Commission to raise €750 billion on the markets for the recovery fund. 

Wednesday’s vote makes it possible for the Council of the EU to swiftly adopt the ORD and start the ratification process in 27 EU countries - so that the recovery plan can be launched as soon as possible. 

In its opinion, adopted on Wednesday by 455 votes in favour, 146 against and 88 abstentions, MEPs upholds the position on the need to introduce new sources of revenue to the EU budget that should at least cover the costs related to the recovery plan. 

They requested a legally binding calendar to introduce these new own resources. 

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