Brussels, 05/10/2004 (Agence Europe) - The responses given by Commissioner-designate Ingrida Udre to the European Parliament questionnaire come as a surprise in favour of minimum tax harmonisation, and for strengthened cooperation if necessary. After her campaign for the European elections, she was expected to appear eurosceptical and fiercely opposed to tax harmonisation. She is, however, following in the wake of her predecessor, Frits Bolkestein, all the way along the line. The Latvian Commissioner-designate, who is one of the three Commissioners under fire from the Socialist Group, is to confirm her position during a hearing before the Parliament on 7 October.
By way of introduction, Ingrida Udre explains that the next Commission has not yet had an opportunity to define its position on tax policy issues and, in consequence, the positions that she will be defending on the subject, which are generally in favour of the current Commission's tax policy, will be her own personal views. For most of the more technical subjects, such as customs and the fight against fraud, Ms Udre essentially follows along the lines of the current Commission.
Corporate taxation. The Commissioner-designate follows the approach taken by Frits Bolkestein when it comes to corporate taxation. She announces that, in her view, the creation of a consolidated common tax base for companies that have lines of business in the EU should be the top priority of the Commission in the taxation field. On the other hand, the question of corporate tax rates is quite a separate problem, she says, a problem that must be the subject of work carried out separately. Ingrida Udre considers it necessary to follow the trend in terms of effective tax rates and to assess the potential adverse effects before envisaging new initiatives in the field.
Strengthened cooperation. The Commissioner-designate said that, if it proves impossible to take a decision within a reasonable time limit by following the usual legislative procedure for issues coming under corporate taxation, then strengthened cooperation could be the only way to move forward in this field. Nonetheless, she went on to specify that strengthened cooperations must not simply be considered as a way to thwart minority blocking in Council. They should rather, she said, be limited to innovative measures which are not yet covered by Community legislation. Furthermore, she went on, strengthened cooperation cannot be used as a last resort and must comply with all the other conditions set out in the treaties.
Tax competition. Like her predecessor, Ingrida Udre considers a certain degree of tax competition within the EU is welcome and can contribute to bringing down tax pressure but that it is necessary to guarantee equitable competition conditions for all by combating the distortionary effects produced by preferential tax regimes, as foreseen in the Code of Conduct on corporate taxation. She remarks that tax competition can prove harmful when it alters the capacity of Member State to finance essential public services and is also likely to have an impact on the structures of taxation systems by placing the tax burden on less mobile bases such as labour.
Legislative simplification. The Commissioner-designate takes up the torch by giving her assurance that she will get down to this task "where her predecessor left it". She plans to continue along the same road and to "redouble the effort to simplify customs and tax regulation" and, she added, "I strongly believe that better lawmaking should be, above all, a frame of mind and not a bureaucratic add-on".
Reduced rate of VAT. Ingrida Udre is aware of the fact that finding a solution on simplifying the VAT regime with a reduced rate for high labour intensive services, blocked in Council since July 2003, will be one of the most difficult tasks ahead of her. However, she goes on to explain, she believes the current situation is untenable in the long term and that a solution must be found. Her point of departure would be the proposal of the Irish Presidency allowing Member States to request authorisation to apply a reduced rate on a case by case basis. This solution, she comments, is supported by 20 Member States and she is willing to examine it. Ms Udre explains, however, that such a solution does not completely resolve the problem of unequal treatment between old and new Member States and that this is a matter she will endeavour to settle.
Excise. The Commissioner-designate urges for harmonisation of excise rates between Member States, which would obviously reduce if not completely eliminate distortion as well as fraud and the smuggling of products subject to excise already paid. She therefore undertakes to open the debate with the Member States and the Parliament although she is aware that this is a highly sensitive and controversial issue.
Personal profile: Answering the MEPs' "standard" questions on her personal and political profile, Ingrida Udre did not, in this context, answer allegations of corruption raised in Latvia. She gave her word that she had "neither a business nor financial involvement", and has not "contracted any undertaking which may be incompatible" with her future post. Spokesperson and president of the Latvian parliament, she also spoke of her Masters in Economics, "very useful in (her) mandate as Minister for the Economy, during which (she) was able to acquire in-depth management skills". She referred to her four years' experience as senior director of audit with Coopers & Lybrand, which became PriceWaterhouseCoopers.
A surprising little touch came when Ingrida Udre spoke of her international basketball experience, which she saw as "the opportunity not just to appreciate the importance of teamwork, but also to develop (her) ability to take initiatives at the right time, in the interest of the whole team".