On Monday 22 March the European Parliament’s Subcommittee on Fiscal Affairs (FISC) discussed the draft own-initiative report by Claude Gruffat (Greens/EFA, France) on sustainable taxation post-Covid-19 (see EUROPE 12678/19).
The European Parliament has never yet taken a position on this subject and it must be said that this first draft report has received a rather mixed reception.
“Climate change, rising inequality, technological and demographic change are transforming our societies and our way of life, leaving European citizens anxious for their own future and, of course, that of their children”, explained Claude Gruffat. In the face of these challenges, governments need to rethink the tax mix, he added.
His report aims to set a “roadmap” or to act as a “think tank”. It suggests several avenues, including new environmental taxes such as taxes on natural resources, distance-based charges in the transport sector, fuel prices and taxation of deforestation.
It also calls on Member States to improve the efficiency of personal income tax, especially for the better-off, as it is the most progressive tax.
But this does not seem to be to everyone’s taste, starting with the EPP group. At the meeting, Isabel Benjumea (EPP, Spain) said that the aim of the FISC subcommittee was not to suggest that Member States raise taxes.
The MEP said she disagreed with the text as it stands, particularly criticising the provisions that call on Member States to shift taxation from labour to pollution, but also to capital and wealth.
Gunnar Beck (Identity and Democracy, Germany) criticised the report for calling for higher taxes “with no limits”. He spoke out in favour of taxes on “lockdown profiteers”, such as GAFA and pharmaceutical companies, as well as on financial transactions.
“What we really need is an improvement in competitiveness and social justice”, he said, not “this kind of green ideology”.
“It is not a question of increasing taxation” but of “shifting the tax burden from labour to externalities” said Pedro Marques (S&D, Portugal), supporting Claude Gruffat’s draft report.
For his political group, the implementation of compensatory measures to accompany environmental taxation will be fundamental, he pointed out.
MEP Billy Kelleher (Renew Europe, Ireland) supported the general nature of the report, while acknowledging that the “devil is in the detail” and that particular attention should be paid to SMEs in this report.
Political groups have until 13 April to table their amendments to Mr Gruffat’s report, before a vote in the Committee on Economic and Monetary Affairs (ECON) on 27 May. (Original version in French by Marion Fontana)