EU 'preparing direct tax'

The EU's 170bn euro budget could be boosted by a direct tax
The EU's 170bn euro budget could be boosted by a direct tax

By staff

Proposals for a direct tax levied by the European Union are being prepared in Brussels.

The EU's budget commissioner Janusz Lewandowski said he would bring forward the plans to bypass national governments and tax EU citizens and companies directly next month.

The money would be spent on European policies including a financial transaction tax, CO2 emission auctions and an aviation scheme, Mr Lewandowski told the Financial Times Deutschland newspaper.

"A transaction tax can bring in a big amount of money," he said. "The others will only contribute a smaller part to the 140 billion euros a year we are spending."

The direct tax is likely to be met with a hostile reception in Britain by the ruling Conservative party - meaning their pro-European Liberal Democrat partners in government's reaction could be crucial to ensuring the issue does not divide the coalition.

The German government quickly made clear its opposition to the move.

"The demand to introduce an EU tax contravenes the position underlined by the (German) government in its coalition agreement," the Reuters news agency quoted a finance minister spokesman as saying.

"The government's reservations are about the instrument of an EU tax as such."


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