Tax Changes Needed in Europe

November 29, 2012 Taxation in EU

Tax in Europe

BRUSSELS – EU countries need to act now to broaden their tax bases and to reduce the unsustainable and damaging biases in their tax systems.

On November 28th the European Commission released its Annual Growth Survey for  2013, providing EU member countries with policy guidance aimed at boosting economic growth in Europe and at encouraging the development of more efficient and fairer tax systems.

In the report the Commission issued five objectives for tax policy changes in Europe, suggesting that all EU countries should fight to improve tax compliance, to shift tax obligations from labour to consumption, to impose more green taxes, to broaden tax bases, and to remove tax bias which encourages taxpayers to take on more debt.

The Commission explained its suggestions, saying that excessive taxation on labour and corporate profits can distort the economy and hamper growth, and instead governments should shift tax burdens from productive sectors to consumption.

Existing green taxes should be adjusted to ensure that tax rates on traditional fuels and greenhouse gas emissions are set at appropriate levels, and any reduced VAT rates on energy use should be abolished.

All EU countries also need to consider removing VAT concessions on consumer products in order to lower primary VAT rates without impacting overall revenues levels.

The European Commission also called on governments to revaluate their tax systems in order to remove tax biases which currently encourage taxpayers to take on housing mortgages, as such policies can contribute to unsustainable price bubbles  on the housing markets.

Photo by mondays child