Slovenia Welcomes EU’s Proposed Tax on Global Online Giants

By , 21 Jul 2020, 12:33 PM Business
Slovenia Welcomes EU’s Proposed Tax on Global Online Giants This photo (C) Lars Aronsson, CC-by-1.0

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STA, 21 July 2020 - Prime Minister Janez Janša has described decisions on the EU's own resources as one of the biggest achievements of the latest marathon summit of the bloc's leaders. In his view digital tax will likely make the biggest potential own resource of the EU.

Janša made the comments after the summit agreed a pandemic recovery package comprising the bloc's next seven-year budget to the tune of EUR 1.074 trillion and a EUR 750 billion recovery fund, of which EUR 390 billion will be in grants and the rest in loans.

Related: Janša Pleased With Results of EU Budget Talks

To allow the European Commission to borrow in the markets to finance the recovery, the headroom - the difference between the own resources ceiling of the long-term budget and the actual spending - has been temporarily increased by 0.6 percentage points.

This pandemic debt, and grants, will have to be repaid, with EU leaders committing to do so by the end of 2058. The increase in the own resources ceiling will now need to be ratified by the national parliaments.

To make the repayment of that debt easier, EU leaders also committed today to work toward reforming the system of own resources in the coming years by introducing new own resources such as a non-recycled plastic tax, to be introduced next year.

The European Commission will also propose a mechanism to tax carbon-intensive industrial imports from third countries, and a digital levy, plus an overhaul of the emissions trading system to expand it to the aviation and maritime industries.

"The subsidies will have to be repaid. One of the major shifts is those few words about own EU resources, because in seven years' time when we negotiate the next budget this will be the key," Janša said, singling out digital tax as likely the biggest potential own resource.

The coronavirus crisis has substantially increased the profits of digital giants, having accelerated a change in lifestyle, the profits that will at least double over the next five years, Janša said, adding that while profits are being generated everywhere, levies are not collected in the EU. "It's as if cars were being refuelled without any excise duty charged."

Janša also emphasized that no single member state could tackle the digital tax and only the EU was big and strong enough to negotiate a global deal for the benefit of all. "When it comes to big giants even the countries they come from have no serious oversight of the profits that are up to trebling in record time."

The Slovenian prime minister noted that he had talked with OECD Secretary-General Angel Gurria, pointing to the efforts for a deal on digital tax within the Organization for Economic Cooperation and Development.

Janša said taking such decisions was not problematic for the Slovenian parliament. Tax on emissions and plastic would be a problem for the countries that have included the resources in their national tax policies.

Although out of the spotlights, the headway on own EU resources is in Janša's view key from the aspect of agreements on all future financial instruments of the EU.

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