On Thursday 11 October, the European Court of Auditors adopted a fairly scathing opinion on the European Commission's proposals on own resources for the multiannual financial framework (MFF) of the EU 2021-2027. It considers that the proposals are overly complex.
"EU financing has not had a major overhaul for 30 years", said Eva Lindström, the member of the Court responsible for the opinion. "Parts of the proposal will help to simplify the system, for example, the simplification of the VAT element and the phasing-out of corrections. However, overall the proposed system remains complex and we find it is not always based on fully robust assumptions", she considers.
The Commission has proposed to maintain customs duties, but reducing the retention rate of collection costs for member states, keep the GNI-based contribution as a significant source of income and simplify VAT element. These three own resources would represent 87% of EU revenue, to which three new own resources would be added: 20% of the revenue generated by the emissions quota trading system; a call-in rate of 3% applied to the new common consolidated corporate tax base; a national contribution calculated on the basis of the volume of unrecycled plastic packaging waste in each member state.
These new own resources would represent around 12% of the total EU budget and could contribute €22 billion a year to financing the new priorities, according to the Commission's figures.
Corporate tax will be too late. However, the Court of Auditors argues that the envisaged corporate tax is subordinate to the adoption, at national and EU levels, of the directive on taxation and at best, will not be ready to be applied until several years after the start of the new budgetary period.
Volatility of quota prices. The proposed revenue based on greenhouse gas emissions is unlikely to encourage the member states to do more to reduce these emissions and are unstable, in view of the extreme volatility of quota prices, the Court points out.
Furthermore, the calculations concerning the revenue linked to plastic packaging waste should be based on better data.
The simplification of the VAT element is based on assumptions that go against some of the measures taken by the Commission (on how to calculate this resource), in the view of the Court.
'Yes' to ending rebates. The phasing-out of corrections (budgetary rebates) constitutes progress in the implementation of a transparent and less complex system, the Court states. Under the proposals, corrections will end in 2026, but a number of countries are calling for them to be phased out sooner than that. (Original version in French by Lionel Changeur)