As part of a new proposal, the European Commission has announced that it’s hoping to scrap the current veto system for individual member states’ tax policies. The EU says that the current system is outdated, and that, in terms of speeding up legislation, the requirements for unanimity should be removed.
At the moment, the EU struggles to agree on tax policies, resulting in major companies choosing to operate in states with lower taxes like Ireland or Luxembourg. Going forward, the EU wants to create equal tax policies, put a stop to member states giving lower taxes to large firms, and it wants to improve the way the Commission responds to scandals.
After this has been implemented, the Commission states that it wants to make changes in other parts of the EU’s tax policy, like VAT and corporation tax. They plan to implement the changes by 2025.
This has been criticised and rejected by some governments, as it could see EU countries with new levies imposed on them. For instance, the Irish government said that the idea “does not support any change being made to how tax issues are agreed at EU level”.
EU budget commissioner Pierre Moscovici said: “The EU has had a role in taxation policy since the origins of the Community six decades ago. Yet if unanimity in this area made sense in the 1950s, with six Member States, it no longer makes sense today.”
“The unanimity rule in taxation increasingly appears as politically anachronistic, legally problematic and economically counterproductive. I am fully aware of how sensitive an issue this is, but that cannot mean that the discussion is off limits. So let’s begin this debate today.”
President Jean-Claude Juncker said he is strongly in favour of moving to qualified majority voting and a stronger voice for the European Parliament on the common future of taxation in our Union”. However, the proposals are likely to face strong opposition from member states.
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