Can tax be “a force for good” and allow for the transition to a green economy? This is the question that several European and international experts tried to answer on Wednesday, 27 February at a conference organised by the Association of Chartered Certified Accountants (ACCA) and Deloitte in Brussels.
All in all, speakers stressed that the EU's tax systems are out of sync with the main challenges of the 21st century, such as globalisation, climate change and unemployment.
They recognized that taxation has an important role to play and that specific tax measures such as a carbon tax or a single-use plastic tax can help. However, these are no longer sufficient and the speakers called for a broader reflection.
The impact of existing green tax policies is not yet very clear, explained Gianmarco Monsellato of Deloitte. According to him, in many European countries there is a public rejection of the green agenda precisely because of taxation. In general, citizens refuse to pay more taxes, even for the green economy, and there is a risk that the ecology will be contaminated by very unpopular tax policies in the EU.
Thus, according to him, for these environmental taxes to work, there must be a real benefit that is visible to the public. For example, the link between these taxes and growth and employment should be examined and whether they would generate sufficient revenue for redistribution.
But the speakers were also aware of the difficulties in finding a uniform response within the EU. Starting with Andreas Strub, Head of Unit for Tax Policy within the General Secretariat of the EU Council, who recalled that the European treaties allow Member States to have full control over their tax systems.
It is precisely to overcome this deadlock that the European Commission put forward its proposal to gradually move from unanimity to qualified majority voting in tax matters in certain areas (see EUROPE 12172), including environmental and energy taxation, said Carola Maggiulli, of the European Commission's Directorate-General for Taxation.
For the Commission representative, the incentives have so far proved to be environmentally inefficient and often tend to complicate tax systems. Coordination in Europe is, in her view, a preferable option.
She also announced that the European Commission is currently assessing the functioning of the Energy Tax Directive, which she considers outdated. The Commission's evaluation will be published this summer and should be followed by an impact assessment for a new proposal.
“Tax is only one among a range of different policy options to halt the pace of climate change: regulation, green incentives and changes to capital markets [...], must all play a role”, concluded Yen-pei Chen of the ACCA. (Original version in French by Marion Fontana)