Germany Expresses Opposition To EU Tax Plans

tax       2004-02-04 
Following a recent Handelsblatt interview in which EC Budget Commissioner, Michaele Schreyer renewed calls for a direct tax to fund the European Union, the German government has expressed its opposition to the principle.

"The idea of an EU tax is not something the German government will be following up," a spokesperson for the Finance Ministry announced on Monday.

The EC is set to publish a paper next week which, according to reports in the European media, calls for the complex system of VAT revenues and duties which finance the EU's EUR100 billion budget to be modernised and replaced with a direct levy.

The three options put forward for replacing the current system are: allocating a larger percentage of VAT revenues, imposing an energy tax, or allocating a portion of corporate tax revenue. The draft document also contains plans to replace the UK's annual EUR3 billion budget rebate with a new system which would allow all countries which pay more into the European Union than they receive to claim some back.

However, the UK government is expected to strongly resist both proposed changes, and it now appears likely that it will be joined in its opposition by the German authorities.