Daily Express
Now EU wants a £510 income tax
31/12/06
By Kirsty Buchanan
Deputy Political Editor

BRUSSELS politicians have drawn up proposals to create a European income tax
which would leave Britons shelling out £510 a year to the superstate.

The rumbling row over the size of Britain’s rebate from Europe resurfaced as an
influential committee of MEPs received recommendations for sweeping reforms to
the Union’s current funding system.

The Committee On Budgets is facing calls to scale back the current system in
favour of a form of direct taxation when Britain’s rebate is re-negotiated in
2008.

A report drawn up for the committee urges MEPs to “seriously consider the
necessity of ensuring a direct and transparent link” between the Union’s
resources and its citizens.

It adds that, “in the search for such a link due consideration be given to paying
part of an identified direct tax” to the Union’s budget.

The recommendations, drawn up by the Committee On Regional Development, have
been seized on by the UK Independence Party as evidence that Britons face the
threat of a Brussels tax on their pay packets on top of ordinary tax.
Currently the Treasury pays £9billion to the European Union and receives a
rebate of up to £3billion annually.

Our Euro funding is not sliced from earners’ income tax but is raised primarily
on levies on imports into Britain and on VAT charged on most goods we buy.

A portion is also taken from Britain’s own gross domestic product.

John Whittaker, UKIP MEP, warned that Britons would end up out of pocket if
Brussels looked to raise revenue through direct taxes.

“British taxpayers are already paying through the nose to fund the EU, the last
thing they need is yet another tax,” he added.

“The EU is not directly accountable to the people of this country. To give these
unelected bureaucrats power over tax is a massive step in the wrong
direction. Most people see the EU wasting money left, right and centre. The last
thing we need is them having more to pour down the drain.”

The committee’s paper accepts that while national contributions will remain an
important source of the Union budget it proposes a revenue-raising system to
reduce the importance of national contributions.

Rebates which are “manifestly no longer justified” shouldbe abolished, the paper
adds, while any new system should “reflect the relative prosperity of each
member state and itsability to pay”.

The paper suggests a direct tax could take the form of an income tax or a
corporation tax.

The rebate was won by former Prime Minister Margaret Thatcher in 1984 to make up
for the huge farming subsidies enjoyed by France and Germany.

But even with the rebate, Britain remains the second highest Union contributor
out of an institution that will, from tomorrow, boast 27 member states.

In 2005, Tony Blair suggested Britain would be prepared to give up some of the
£3billion rebate in return for cuts in German and French farm subsidies but
French President Jacques Chirac refused to give way.

The Union budget is still dominated by farming payments which eat up
£37.73billion, or 49 per cent of all spending.
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