MEPs push for a bold own resources reform

Lawmakers insist on legally binding EU revenue calendar

Photo: EP Jose Manuel Fernandes.

Members of the Committee on Budgets discussed future EU financing in Tuesday's meeting with the MFF/Own Resources negotiating team reporting back from the first trilateral talks with the Council. They have also endorsed their legislative opinion on the Own Resources Decision as to ensure the rapid implementation of the EU Recovery Plan.

By 33 votes against 5 and with 2 abstentions, lawmakers backed in their draft report on the Own Resources Decision the approach whereby a higher own resources ceiling provides the fiscal headroom to guarantee borrowing and lending activities that underpin the Next Generation EU plan. The report will be submitted to a vote in plenary during the September session that will be held in Strasbourg on 14-17 September.

The Own Resources Decision is the legal basis which provides for the main revenue sources of the EU budget. The new decision will constitute the legal basis authorising the borrowing of funds on the financial markets to finance the Next Generation EU Recovery instrument.

A basket of new Own Resources should be crafted to cover entirely the costs of repaying the debts incurred under the European Recovery Plan in the medium to long term, Budget MEPs insisted.

At the extraordinary EP plenary session in the end of July, the full house reiterated that a robust system of new own resources including a digital tax or levies on carbon for the repayment must be guaranteed, with a binding calendar. According to the calendar proposed by Budgets Committee, from 1 January next year should be introduced an Own Resource based on revenue stemming from the EU Emissions Trading System. Precisely two years later, from 1 January 2023 should be brought in Own Resources based on the revenue collected from the Digital Services taxation and on a Carbon Border Adjustment Mechanism.

From 1 January 2024 they want to see an Own Resource based on a Financial Transaction Tax and 24 months after - an Own Resource based on the share of taxable profits attributed to each Member State pursuant to Union rules on the Common Consolidated Corporate Tax Base.

Likewise, Budget MEPs maintain that rebates and other correction mechanisms on the revenue side should be scrapped.

We urge the Council to proceed immediately with the approval of the decision on the EU system of own resources, centre-right Portuguese MEP Jose Manuel Fernandes, co-rapporteur on the file, stated. Saying that this decision is vital and historical, he explained that it will allow the financing of the Recovery Instrument, while ensuring the introduction of the first new own resource in more than three decades.

The European institutions should now commit to a binding agreement for the implementation of other sources of revenue without overburdening the citizens, whilst contributing to the Digital Agenda, to the Green Deal and to a swift and strong recovery, he added.

The other co-rapporteur, French RENEW Europe MEP Valerie Hayer emphasised that 32 years after the last introduction of a new type of own resource, namely the GNI contributions, Members of the European Parliament show they're ambitious for Europe and above the fray: “We want to make big tech, big foreign polluters, multinationals practicing tax optimisation who benefit from Europe contribute fairly to its recovery.”

 

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