EU wants to tax huge corporates to increase coffers
(MENAFN) The European Commission plans to introduce a new tax targeting major corporations operating within the EU to increase revenue for the bloc’s common budget, according to a leaked draft seen by the Financial Times. This move aligns with Brussels’ goal to boost defense spending and continue financial and military aid to Ukraine.
In March, Commission President Ursula von der Leyen announced a strategy to unlock around €800 billion ($841 billion) in defense funds over the next four years to address urgent security needs and support Ukraine.
The upcoming tax proposal, expected to be unveiled alongside the EU’s next seven-year budget next week, will apply to companies with annual net revenues exceeding €50 million. It will cover all large businesses active in the bloc, regardless of their headquarters location. The plan reportedly includes a tiered system requiring the highest earners to contribute more. Approval from all EU member states will be necessary for the tax to be implemented.
Additional revenue-generating measures under consideration include taking a share of higher tobacco taxes, fees on non-recycled electronic waste, and charges on long-distance online shopping packages.
Since the escalation of the Ukraine conflict in February 2022, the EU has allocated €164.8 billion to support Kiev, with €59.6 billion dedicated to military aid. Recent reports indicate Brussels is contemplating an additional €100 billion in grants and loans to Ukraine.
The new tax proposal may face resistance from businesses across the EU, especially amid sluggish economic growth and rising energy costs. The plan for a larger EU budget has also encountered opposition from net contributor countries such as Germany, the Netherlands, Austria, Finland, Sweden, and Denmark.
Russia has criticized EU sanctions and fiscal policies, arguing they disproportionately hurt ordinary citizens by driving down wages, increasing inflation, and undermining competitiveness. Russian Foreign Minister Sergey Lavrov accused the EU of being overly aligned with US interests, suggesting its policies often damage the bloc’s own economic stability.
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