Simplifying and harmonising tax systems would enable the EU to become more competitive, according to experts at a conference organised by the pro-European think-tank Bruegel on Wednesday 5 June.
“We’re highly dependent on labour taxes, about 51% of the taxation mix while the population is aging and shrinking. So that is not sustainable”, regretted Edwin Visser, a partner in the audit group PwC (see EUROPE 13399/27).
Increasing wealth tax (see EUROPE 13417/20) and reducing labour taxes would, in his view, be the solutions to achieve a balance. He also said more weight should be given to green taxes in the tax mix.
Pascal Saint-Amans, former Director of the OECD's Centre for Tax Policy and Administration, defended the same measures. He pointed to the fact that Member States need more resources than ever before, particularly to deal with the war in Ukraine, the energy crisis and the green transition. A debate on new taxation or new forms of taxation is emerging.
“The past 15 years have been about trying to introduce global regulation, or a tax regulation (...) by putting anti abuse provisions, by organising tax cooperation, by putting in place a global minimum tax, and this is complex”, he explained. “By definition, tax is complex and has to be complex. But when you bring 140 countries together, it’s even more complex”, he added.
In addition to simplifying and harmonising systems, the opportunity now open to EU Member States is to “re-examine and hopefully reform the large number of wasteful tax incentives that are there for corporations”, said Fabrizia Lapecorella, Deputy Secretary-General of the OECD. She calls into question income-based incentives in particular, which have increased fivefold since 2000.
Ms Lapecorella also supported the two proposals on own resources (see EUROPE 13401/19) which have not been approved by the EU Council and which are in line with the OECD recommendations. She criticised the way in which the two biggest items in the EU budget are spent: the cohesion and common agricultural policies, whose funds could be better targeted. (Original version in French by Anne Damiani)