On Monday 17 July, MEP Kira-Marie Peter-Hansen (Greens/EFA, Danish) presented her draft own-initiative report on the role of tax policy in times of crisis to her colleagues on the Subcommittee on Tax Matters (FISC). Welcomed by S&D and The Left, it gave rise to reservations among Renew Europe and the EPP.
The report attempts to find solutions to the negative effects of the Covid-19 crisis and to respond to the current energy crisis and inflation, while aiming to “rise to the challenge of the climate and biodiversity crises” through “a solid and just taxation system”.
Mrs Peter-Hansen therefore proposed the creation of a permanent tax on excess profits in all sectors. “Our economies are struggling with different issues, whether it’s an aging population, the green transitions, new developments that have an impact on our economy, and where tax plays a role”, she explained. She has asked the European Commission to carry out an in-depth comprehensive analysis of the tax system, including a possible simplification of national tax systems, different tax incentives, value added tax (VAT), income tax, wealth, tax wins, windfall taxes, etc.
She also condemned the fact that small and medium-sized enterprises (SMEs) are particularly affected by the complexity of the tax system and tax compliance compared to multinationals. She also found that “Member States rely disproportionately on labour income tax, social contributions and indirect taxes” (see EUROPE 13219/16).
“Women are affected by an unfair and biased tax system, because they are generally more dependent on earned income and spend a greater proportion of their income and consumption and hold fewer shares in companies”, she added.
In her view, reform of the tax system would include a reassessment of current inheritance policies, a prohibitive tax on private jets, a carbon tax to ensure that the ‘polluter pays’ principle is properly applied and a progressive wealth tax (see EUROPE 13221/11).
Evelyn Regner (S&D, Austrian) announced that she wanted to focus more on the causes of social inequality. José Gusmão (The Left, Portuguese) would like to take greater account of certain forms of income such as interest, royalties and relationships between parent companies and subsidiaries.
Lídia Pereira (EPP, Portuguese), conversely, felt that we should “reduce taxes and the administrative burden in a responsible and proportionate way and focus on supporting families and SMEs”.
As for Martin Hlaváček (Renew Europe, Czech), he preferred to focus on reducing tax avoidance and evasion.
MEPs have until Thursday 31 August to table amendments.
Read the draft report: https://aeur.eu/f/84q (Original version in French by Anne Damiani)