Commission to present options for EU tax

The European Commission will present options in September for a new tax to raise money directly for the EU budget.

Janusz Lewandowski, the European commissioner for budgets, said in an interview with FT Deutschland today (9 August) that the Commission was considering different forms of direct tax that would allow member states to reduce their contributions to the EU budget. Referring to the EU concept of own resources through which the EU budget is directly funded from a specific revenue source, he said: “Many countries want to lower their contributions. That opens the door for thinking about own resources, which finance ministers do not have a claim on.”

Lewandowski did not specify which options the Commission was considering. The options are understood to include a tax on air traffic as well as taking a share of the proceeds from the sale of quotas to emit CO2.

At present 76% of the EU’s budget comes from contributions from member states with the rest from the current system of own resources, a share of value-added tax receipts and import duties.

The options will be contained in a discussion paper on the future of the EU budget for the 2014-20 period that will be published by the end of September.

A spokesman for the Commission said today that the options had not been decided yet. He confirmed that member states wanted to limit their contributions to the EU budget.

The Commission’s options paper will start what are expected to be tough negotiations over the next budget as governments try to reduce their contributions to the EU budget as part of wider savings in public expenditure. Governments are expected to oppose creating a new EU tax because they wish to keep control of funds received and spent by the EU institutions.