Reducing tax flexibility further harms smaller EU economies – Sant

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Reducing tax flexibility further harms smaller EU economies - SantMEP 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 emphasised 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."

He added that 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.

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