By Robert Winnett and Bruno Waterfield

The European Union is to push for the right to levy direct taxes on Britons and the citizens of other member countries, the EU Budget Commissioner has disclosed.

The EU hopes that the plan, to be unveiled next month, which could see new taxes on air travel and financial transactions, will give it more independence and fund controversial expansion proposals.

The direct taxes would reduce each country’s annual payment to the EU.

The proposal has sparked fierce reaction from Britain the Treasury has said it would veto any proposal, which would lead to the loss of the budget rebate negotiated by Margaret Thatcher.

Lord Sassoon, the Commercial Secretary, said the Treasury would block any plans. “The Government is opposed to direct taxes financing the EU budget,” he said. “The UK believes that taxation is a matter for Member States to determine at a national level and would have a veto over any plans for such taxes.”

It is understood that the scheme will be backed by some of the EU’s most influential members, including Germany – providing the reduction in the annual country payments matches the extra levies raised in direct taxes.

Janusz Lewandowski, the EU budget commissioner, said: “If the EU had more of its own revenues, then transfers from national budgets could be reduced. I hear from several capitals, including important ones like Berlin, that they would like to reduce their contribution.” He indicated that possible tax sources for Brussels could include an aviation tax and a financial transaction tax. Mr Lewandowski is also thought to wish to raise EU taxes from the sale of carbon dioxide emissions rights – which could lead to higher utility bills and petrol prices.

A spokesman for the Commissioner said yesterday: “The finishing touches are being put on the proposals; they will have numbers and be precise.” The spokesman also said that plans to reform EU spending will be outlined. “Everything will be looked at, especially the weight of agriculture in the EU budget – currently 45 per cent of spending – but also the rebates accorded to Britain, Germany, Denmark and the Netherlands,” the spokesman said.

The EU is seeking to increase its budget by 5.9 per cent to more than €130 billion, including a 4.5 per cent rise in the costs of running the EU’s many institutions.

Open Europe, a British-based think tank, said: “The Commission seems to think that because of the tough economic climate, national governments would be keen to let Brussels collect money for the EU budget directly, rather than handing it over from national budgets.

But what about the ordinary citizens who would be forced to pay?

Imposing an EU tax would be an unmistakable move to a federal Europe, which, time and again, the public has said it doesn’t want.”

Full article


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