Green Taxes Will Help Economy

July 18, 2014 Taxation in EU

COPENHAGEN – Targeted environmental taxes will boost economic growth in the EU.

Earlier this week the European Environmental Agency (EEA) issued a new report on potential environmental changes which could be implemented across the EU in order to boost economic productivity across the region.

In its report the EEA suggested that governments in the EU should reduce their reliance on taxes on labor, such as income taxes or employment taxes, as such levies have a negative effect on economic production.

In order to replenish the revenues which could be lost by lowering labor taxes could be supplemented through taxes on environmental pollution and under-utilization of resources.

Despite being potentially beneficial for the economy, environmental taxes are underutilized in the EU, with governments in the region collecting an equivalent of only 2.4 percent of their tax revenues from environmental taxes.

The experts of the EEA also pointed out that implementing well-planned environmental taxes can have secondary benefits, as countries implementing such measures often see a greater level innovation and development.

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