Reducing tax flexibility further harms EU smaller economies

Former Prime Minister Alfred Sant told the European Parliament that tax competition should remain the responsibility of EU national governments and that he could not vote in favour of a report promoting a common consolidated corporate tax base among all EU member states. Dr. Sant emphasized that reducing tax flexibility would further harm the EU smaller economies which are already facing unfair constraints. The Maltese MEP, who had already voted against the first TAXE 1 report, again voted against the final report on ‘Tax rulings and other measures similar in nature or effect (TAXE 2)’ at the European Parliament in Strasbourg. The recommendations adopted by co-rapporteurs Michael Theurer (ALDE) and Jeppe Kofod (S&D) were approved by 514 votes to 68, with 125 abstentions.
The Maltese MEP said the Report makes recommendations regarding an improvement in transparency related to the taxation measures applying in EU member states. “I agree with these recommendations and fully support measures uniquely designed to promote full transparency in national tax treatments. However the report also proposes measures that implicitly or explicitly promote moves that on an EU wide basis would introduce tax convergence and harmonisation.”

Dr Sant said this goes against the interests of smaller economies of the Union, that lack the endowments of the larger economies. Their flexibility in policy making is already constrained among others, by the convergence in VAT rates, state aid rules, the single currency, the six pack/two pack rules applied to their budgets. As a result, structural divergences between parts of the Union have grown, not diminished. Reducing the tax flexibility of such economies would further increase these disparities, which is unfair, dysfunctional and unacceptable.”

Dr Sant said tax competition should remain part of the limited array of decision tools available to national economies. “Significantly, the report fails to provide a tight definition of fair tax competition, mainly because it is slanted towards a situation in which tax should be harmonised across the EU. For these reasons, I have voted against both TAXE reports.” remarked the Maltese MEP.

Maltese Version – L-EKONOMIJI Ż-ŻGĦAR TAL-UE IBATU AKTAR B’ANQAS FLESSIBILITA’ FIT-TASSAZZJONI

Il-Kap tad-Delegazzjoni Laburista fil-Parlament Ewropew qal li l-kompetizzjoni fit-tassazzjoni għandha tibqa’ responsabbilta’ tal-gvernijiet nazzjonali tal-membri stati tal-Unjoni Ewropea.. Dr. Sant enfasizza li jekk l-UE tnaqqas il-flessibilita’ fil-politika tat-tassazzjoni tkompli tagħmel ħsara akbar lill-ekonomiji ż-żgħar tal-UE li diġa’ ghandhom żvantaġġi inġusi. Fil-Parlament Ewropew Alfred Sant qal li ma setax jivvota favur rapport li jimpromwovi l-armonizzazzjoni tat-tassazzjoni fost l-istati kollha membri tal-UE. Dr Sant kien diġa’ ivvota kontra l-ewwel rapport TAXE 1, reġa’ ivvota kontra r-rapport finali magħruf bħala TAXE 2. Ir-rapport, imressaq mir-‘rapporteurs’ Michael Theurer (ALDE) u Jeppe Kofod (S&D) ġie approvat b’514 vot favur, 68 vot kontra u 125 astensjoni.
Dr Sant qal li r-rapport jagħmel rakkomandazzjonijiet għal aktar trasparenza fit-tassazzjoni fl-istati membri tal-UE. “Naqbel ma’ dawn ir-rakkomandazzjonijiet u nappoġġja l-miżuri tat-trasparenza fil-politika nazzjonali tat-tassazzjoni. Iżda dan ir-rapport jipproponi miżuri li fuq livell wiesgħa jintroduċi konverġenza u armonizzazzjoni tat-taxxi fl-istati membri kollha tal-UE”.

Dr Sant qal li dan imur kontra l-interessi tal-ekonomiji ż-żgħar tal-UE li m’għandhomx id-doti tal-ekonomiji l-kbar. Il-flessibilita’ fit-tmexxija tal-ekonomiji ż-żgħar diġa’ hija ristretta bil-konverġenza tar-rati tal-VAT, ‘State aid rules’, il-munita waħda u r-regoli li jorbtu l-budget tagħhom. Dawn wasslu biex jiżdiedu, mhux jisparixxu, id-diverġenzi bejn parti u oħra tal-UE. Jekk innaqqsu l-flessibilita’ tal-ekonomiji ż-żgħar tkompli tiżdied din id-disparita’ li diġa’ teżisti. Dan mhux ġust u mhux aċċettabbli.”

Dr Sant qal li l-kompetizzjoni fit-taxxa għandha tibqa’ fil-ġurisdizzjoni tal-ekonomiji nazzjonali. “Dan ir-rapport ma jagħtix definizzjoni ta’ kompetizzjoni ġusta fit-tassazzjoni. Ir-rapport huwa inklinat lejn sistema armonizzata ta’ tassazzjoni fl-istati membri kollha tal-UE. Huwa għalhekk li ivvotajt kontra ż-żewġ rapporti li tressqu.” saħaq Dr Sant.