Monday, April 04, 2011

Ever heard of Algirdas?

Ring a bell? How about Šemeta? No?

How about Algirdas Šemeta? OK have you heard of George Osborne? Well Mr Šemeta is like him but more important. He is the European Commissioner for Taxation and Customs Union, Audit and Anti-Fraud. And he has a key message.
Let me say a few words on EU tax governance. Each Member State has the right to decide on its own approach.
Which sounds excellent until his next sentence,
closer coordination of tax systems and smarter taxation are crucial for EU recovery and growth
The plans are truly bizarre and their logic is as sprung as GM Hopkins verse. Try this for example,
Tax competition is accepted - and may even be a good thing - as long as it does not endanger the capacity of Member States to collect the revenue that they would fairly expect.
So we set a high tax rate, Denmark sets a low one, that is tax competition. Business move to Copenhagen from Britain. This harms Britain's tax raising capacity. That is harmful tax competition.

And what is going on here?
The Code of Conduct on business taxation is our tool to ensure that this principle is respected in the EU and beyond. It is a soft law instrument: under a peer review process, Member States examine their potentially harmful business tax measures and commit to correct them.

It has proved useful in the past. It is not ambitious enough anymore. There is a need to find renew support on the principles at political level and to sharpen our instruments. In this period of intense consolidation efforts, no margin of manoeuvre exists: transparency and trust is the standard and no one can steal a tax base or tax revenue from its neighbour. And let me emphasise that this principle is also valid in our relations with third countries.
Valid in their relations with third countries. What! The EU is going to force the US to change its tax rates? You cannot set that low tax. It's not fair>

Yeah right.
No they will attempt to bully Switzerland and Norway.

No comments: