Ecopreneur.eu, the European Sustainable Business Federation, has filed its feedback on the public consultation concerning the European Commission’s Communication on a Roadmap for Taxation – more efficient EU law-making procedures.
Taxation policy is crucial for realising the circular economy. The economic framework should foster delivering circular products and services. To make this possible, Ecopreneur.eu urges the next European Commission to move from consensus to majority voting for deciding on certain tax matters including the Value Added Tax (VAT).
Existing EU regulation is inadequate to realise the circular economy. It is clearly unable to solve the huge waste problems for many products and materials in virtually all sectors, ranging from construction and plastics to food, textile and electronics. Circularity over the whole life cycle needs to be considered.
Ecopreneur.eu advocates the EU to take the lead in introducing a tax shift from labour to resources by member states, and to open up the EU VAT Directive to allow member states to differentiate the rates on the basis of circularity and sustainability. Here you can find our proposal on VAT rate differentiation. We therefore welcome the recent adoption by the European Parliament with some amendments of a proposal by the European Commission about the VAT rates, which includes a call to Member States to seize opportunities of VAT differentiation for sustainable development.
However, under the current EU regulation, the VAT rate reform tax proposal needs unanimous support from the Council for adoption. This existing voting procedure has effectively blocked VAT reform for about 20 years. In the light of realising a circular economy, Ecopreneur.eu therefore supports a move from consensus voting to quality majority voting on certain tax matters including the VAT.