By Martin Banks - 19th August 2010
This would only lead to a higher level of taxation in the EU
Peter Jungen
A leading business organisation has given a frosty reaction to possible plans for direct EU taxes.
It comes after EU budget commissioner Janusz Lewandowski said last week that he would present some options next month for direct EU taxes.
He said the burden on national budgets could be eased if the European commission were able to levy direct taxes.
EU taxes on aviation, financial transactions and CO2 emission permits could be considered, he said.
However, Peter Jungen, president of the Brussels-based SME Union, the business organisation of the EPP, has joined the UK, France and Germany - all net contributors to the EU budget - in rejecting the idea.
Jungen said, "This would only lead to a higher level of taxation in the EU. New taxes would only lead to more money to be spent for the wrong priority.
"The EU budget today is already in conflict with EU tasks: The money spent by the EU should only be focused on services which can not be rended by the EU members.
"More important would be a revision of the EU budget which is definitely not in line with the EU 2020. It definitely violates the principles of subsidiarity as handing out of subsidies to preserve old structures is not in line with the basic principles of the EU.
"Therefore, a revision of EU budget should also include a reduction of spending in areas which are violating the subsidiarity principle and refocus spending on new priorities which would support EU 2020."
He added, "Furthermore, EU-wide taxation would reduce tax competition. Less tax competition can make the overall tax system more complicated. It would finally lead to a higher taxation of in particular small enterprises and entrepreneurs.
"As any decision on taxation in Europe requires unanimous decision of all member countries, it is anyway very unlikely that any such decision to introduce European taxes would be taken."
Jungen said that it is much more important to have a structural debate on EU objectives and the necessary means to fund its priorities for the future.
"Besides that, any attempt to circumvent the budget restraints for eurozone countries by raising direct funds should be anyway rejected."
German news website Spiegelonline said there was rare unity among the main German parties in rejecting the idea, except for the Greens.
Historically, national governments levy taxes in the EU and some countries, including the UK, get rebates.
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