Momentum for 'European tax' grows

Momentum is growing behind controversial proposals for European Union consumer taxes to fund Brussels budgets that have expanded as its powers have grown with the Lisbon Treaty.

By Bruno Waterfield
Published: 7:00AM GMT 19 Jan 2010

Luxembourg has added its voice to calls for the EU to take a direct cut on future levies on financial transactions on carbon emissions.

Luc Frieden, Luxembourg's finance minister, said that taxes would give the public a "direct link" to the EU, which is often seen as being remote from Europe's citzens.

"It would make sense to rethink the financing of the EU budget through a European tax imposed on certain services or products that would go directly into the European budget," he wrote in Le Figaro, the French daily newspaper.

"Because of the cross border nature of certain activities, a European environmental tax or a tax on certain financial transactions would be particularly suitable."

The idea for an European tax is supported by Herman Van Rompuy, the EU President appointed after the Lisbon Treaty entered into force last November.

Jose Manuel Barroso, the European Commission President, has thrown his weight behind the plan, to be tabled as part of a review of EU funding this spring.

Last week, Janusz Lewandowski, the newly appointed Polish budget commissioner, lent his support to the proposals but warned an EU tax "could prove detrimental" to public opinion.

"I am not against the idea," he said.

Proposals to use VAT, fuel duties or aviation taxes to give the EU a direct and independent source of income have long been demanded by Commission.

Recent calls for a carbon levy to fight climate change and a "Tobin tax" on transactions in the financial sector have given the idea a new lease of life.

Alain Lamassoure, the French chairman of the European Parliament's budget committee, who is close to Nicolas Sarkozy, has suggested a tax on all text messages sent by mobile phones to fund the EU.

European Federalists support EU taxation as a way of giving Brussels autonomy from national treasuries, who begrudge contributions to Brussels.

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