EU Budget Falls Short of Expectations
In the midst of a G20 finance ministers meeting in Durban, South Africa, German Finance Minister Lars Klingbeil has voiced his opposition to two key proposals from the European Commission. The first is a proposed tax on large companies with an annual turnover of over 100 million euros, known as the Corporate Resource for Europe (CORE), and the second is a plan to contribute 15 percent of national tobacco tax revenues to the EU budget.
The CORE tax, part of the European Commission's plan to reform the system of own resources, would require companies to pay a lump sum contribution to the EU budget based on their turnover, with larger companies paying less proportionally due to capping. This tax, intended to raise around €6.8 billion annually, has been met with substantial criticism, including from Klingbeil, who argues that it is unfair and could harm European businesses competitively.
Klingbeil's rejection of the CORE tax is due to concerns about staying within financial limits and maintaining the competitiveness of German businesses. He has also criticised the proposal to take 15 percent of revenues from national tobacco taxes for the EU budget, expressing similar concerns about competitiveness and fairness.
The German government's stance aligns with its aim to strengthen the country's economy, secure jobs, and attract investments, as previously mentioned. The government believes that these objectives would be undermined by the proposed taxes, which could negatively impact businesses and the overall economy.
The proposal for the CORE tax faces broad opposition among member states, including Germany, and requires unanimous approval by the Council, which seems unlikely given the widespread resistance. Critics, including civil society groups, advocate for a more comprehensive corporate tax reform to tackle tax avoidance and enhance effective tax rates, which they believe would be fairer and more effective in raising revenue.
This tax is part of wider EU budget reforms also seeking funds from environmental and tobacco taxation, but it remains highly contentious and politically uncertain. The future of these proposals will be closely watched as they navigate the complexities of European politics and the needs of its member states.
The CORE tax, a part of the European Commission's plan to reform the EU's own resources, has garnered opposition from German Finance Minister Lars Klingbeil, who argues that it is unfair and could negatively impact European businesses. Moreover, Klingbeil has criticized the proposal to contribute 15 percent of national tobacco tax revenues to the EU budget, expressing concerns about the impact on the competitiveness of both German businesses and the overall economy.
