Maltese and Cypriot MEPs vote against tax harmonisation in EU

Maltese MEPs and their Cypriot counterparts have voted against a report which urges the European Union to introduce tax convergence and harmonisation among all EU member states.

The vote passed with 500 votes in favour, 122 against and 81 abstentions.

Head of the Maltese Labour Delegation, Alfred Sant, said that tax competition should remain part of the limited array of decision tools available to national economies.

Speaking before the vote at the European Parliament in Strasbourg Sant said he agreed with all proposals in this report which make recommendations regarding an improvement in transparency related to the taxation measures applying in EU member states.

The report, ‘Bringing transparency, coordination and convergence to corporate tax policies’ was presented by MEPs Annelise Dodds (S&D) and Ludek Niedermayer (EPP).

“I fully support measures uniquely designed to promote full transparency in national tax treatments,” he said.

“However the report basically proposes measures that implicitly or explicitly promote moves that on an EU wide basis would introduce tax convergence and harmonisation.”

He added that this suggestion goes against the interests of smaller economies of the union, which lack the endowments of the larger economies.

“Their flexibility in policy making is already constrained among others, by the convergence in VAT rates, state aid rules, the single currency, the six pack/two pack rules applied to their budgets,” he added.

Sant said that as a result, structural divergences between parts of the union have grown, not diminished.

“Reducing the tax flexibility of such economies would further increase these disparities, which is unfair, dysfunctional and unacceptable,” he added.