I have voted against this Report.
The European Commission aims at introducing more flexibility for Member States to change the VAT rates that they apply to different products. Several Member States have indeed opted for derogations and they apply further reduced rates too that suit their national market.
Further, the proposal aims at safeguarding European public revenues, which is commendable, but it would to do so through a uniform system. This could reduce tax flexibility and could constrain Members states when fixing their domestic tax rates.
Moreover, the way in which the Weighted Average Rate (WAR) mechanism would work is not clear enough. Even if Malta were able to keep its special rates and exemptions, it could be possible that the WAR level would go down to less than the 12% limit set in the Proposal. This could be the case if there was an economic slowdown. Member States not respecting this threshold would eventually be liable to sanctions. Hence, the proposed 12% threshold would not provide enough room for manoeuvre for Member States.
Within this context, the Proposal is pulling away from its primary purpose, as it will not provide for the flexibility it is seeking. To the contrary.
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