European Parliament votes for new taxes in EU to repay recovery borrowing

So-called new "own resources" for the EU budget could include a tax on unrecycled plastic and on goods imported into the EU from countries with less ambitious climate-change fighting standards. [© European Union 2020 - Source : EP]

The European Parliament voted on Wednesday (16 September) in favour of assigning new tax revenues to the European Union to repay the bloc’s intended joint borrowing of €750 billion for economic recovery after the COVID-19 pandemic.

Lawmakers voted 455 votes in favour and 146 against, with 88 abstentions, to introduce new sources of revenue – so called “own resources” – to the EU budget that should at least cover the costs related to the recovery plan.

They could include a tax on unrecycled plastic and on goods imported into the EU from countries with less ambitious climate-change fighting standards. Also under consideration is taxing digital giants and extending an EU CO2 emissions trading scheme into the maritime and aviation sectors.

Carbon levy, plastic tax hailed as potential game-changers for EU budget

Proposals to allocate 20% of revenues from carbon trading to the EU budget, combined with a new tax on plastic waste, could help plug the hole left by Britain’s departure from the European Union, as leaders meet tomorrow to agree on the bloc’s first post-Brexit budget.

Leaders hope the €750 billion recovery fund and its related €1.1 trillion 2021-2027 budget will help repair the continent’s deepest recession since World War Two after the coronavirus outbreak shut down economies.

Wednesday’s vote enables governments to decide on granting the EU budget new “own resources” and for parliaments in the 27 members to ratify it, which would enable the executive Commission to start borrowing the money.

“We will now ensure that the debt is repaid by tech giants, tax dodgers, big foreign polluters and others who do benefit from our single market but do not contribute fairly to our prosperity and the protection of our planet,” said French liberal MEP Valerie Hayer, a co-rapporteur on the issue.

No consent to ‘historic’ recovery plan without new revenues, MEPs warn

The European Parliament will only give its consent to a new EU long-term budget if the basket of own resources is increased to pay for the recovery fund, the main political groups warned in a letter addressed to EU leaders ahead of Friday’s (19 June) summit. 

Subscribe to our newsletters

Subscribe
Contribute