From our analysis of the tax reforms being undertaken across the EU, we see that things are generally moving in the right direction. Efforts are being made to redesign tax systems in a way that supports jobs and growth, and that – crucially – ensures fairness. For example, we see a trend towards greater tax progressivity in many Member States, and targeted measures to protect vulnerable groups.
There has been a new and very visible focus on tackling tax evasion, so that honest citizens don't pay for the tricks of the dishonest. And, many Member States have also focused their tax reforms on boosting competitiveness, for example, by reducing corporate tax rates or using tax measures to encourage research, investment and entrepreneurship. All of this is encouraging, and shows the recognised value of the partnership approach offered through the European Semester.
However, this certainly does not mean that the job is done. Tax reform is not an overnight process. It requires consistency, dedication and continuous review.
On that basis, today we have issued country-specific recommendations on taxation to all Member States except for Finland and Denmark. These are consistent with last year's recommendations, and are carefully tailor-made to each Member States' specific needs and tax policy choices. They also reflect the fact that there has been a marked increase in the overall tax burden across the EU due to the crisis.
In times of consolidation, we are of the opinion that well-targeted spending cuts better support long-term growth. However, if taxes must rise, then it is particularly important that they are both growth-friendly and fair. So we have called on 10 Member States to lower the tax burden on labour, and shift to less distortive bases such as property and environment.
In addition to raising revenues, a stronger focus on environmental taxation will also promote the green economy, offering new jobs and greater competitiveness. Meanwhile, better use of recurrent property taxation, especially if done in a progressive manner, is an effective and fair way of raising public revenue.
Our recommendations to nine Member States to broaden their tax base and simplify their tax system are also given with improved efficiency and competitiveness in mind. This not only offers new revenues without having to increase tax rates, but it can make tax systems more user-friendly for citizens, businesses and administrations.
For five Member States, we have given CSRs on debt bias. Essentially, they need to review their tax systems to ensure that they are not encouraging indebtedness, either amongst private individuals or corporations...
Today, we are asking 13 Member States to improve their own tax governance. This is a timely reminder that national tax reforms, coupled with closer EU coordination, reap the best results.
The good news today is that progress has been made by Member States in improving their tax systems. The more sombre message is that an awful lot more needs to be done. So my message to Member States with these CSRs on taxation is: Keep up the good work; follow through; and go further.
© European Commission
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