European Commission Proposes New Tax System

The European Commission proposed the imposition of value added tax which covers the whole of Europe as part of budget funding reform the European Union (EU) in the future. However, the idea was expected to bring opposition from members of the EU.
The proposal aims to improve the ability of the EU in realizing his desire to have its own budget in 2014-2010 so as to reduce the contributions of its members. So far, nearly 75 percent of the total budget of 123 billion euros in 2010 financed from EU member.

For 2011, yesterday, although opposed many countries due to a tightening budget obligations, the EU Parliament agreed to increase the EU budget in 2011 amounted to 5.9 percent from this year's budget, amounting to 130.1 billion euros or the equivalent of 179 billion U.S. dollars. The budget as proposed by the European Commission.

The majority of EU member governments had agreed to just 2.9 percent budget increase. Some other countries actually requested budget increase was not necessary. "The financial system is slowly EU currently has baffled and cloud the budget contributions of member states, including correction and trimming," said a statement the European Commission on Wednesday (20/10).

EU executive officers filed a number of new measures to collect funding, including participating in financial transactions tax, permit expenditure of gas emissions causing the greenhouse effect, or withdrawal of funds from air transport. In addition, the European Commission proposed the procurement of other value-added tax, such as energy taxes or corporate income tax EU.

The tax proposal must be approved by 27 EU member states and the European parliament. However, the idea of a European tax opposed by a number of major economies in the region, including Britain, France, and Germany, for reasons of recession and debt crisis that forced the EU member states to cut budgets and raise taxes.

"The UK agrees with the number of steps to facilitate the funding of the EU budget. But, we will not agree with the idea of a new tax provision, "said the British diplomat. However, European Commission President Jose Manuel Barroso to invite all the members together to figure out how the EU budget support after 2013.

According to him, the debate is not a taboo. In addition to facing opposition from Britain, the idea of an independent procurement budget in 2014-2020 that would have hampered spending issues in the agricultural sector estimated at 40 percent of the total EU budget. Budget expenditures in the agricultural sector in 1988 recorded 65 percent of the total EU budget and then dropped to 40 percent today.

Budget Britain

The British government yesterday announced plans to budget cuts in front of parliament. The country will cut about half a million government employees, increase the retirement age, and cut social spending. According to British Finance Minister, George Osborne, the country's government will cut public spending by 80 billion pounds or about 125 billion U.S. dollars.

"Dealing with the budget deficit can not be avoided," he said. Defi budget crunches UK reached 11 percent of gross domestic product (GDP), the highest among G7 members. Osborne explains the retirement age be raised to 66 years in 2010. The policy is expected to save the budget more than 5 billion pounds or 7.9 billion U.S. dollars per year.

He added that the British Government had to cut back social fund of about 7 billion pounds of reduction proposal submitted last June by 11 billion pounds. Approximately 490 thousand civil servants would be cut in four years. Meanwhile, Britain's debt reached a new record in September.

According to the National Statistics Office (Office for National Statistics / NOS), the country's debt reached 64.6 percent of GDP, the highest since 1993. NOS reported total debt in the last month reached 15.607 billion pounds, up from the same period last year amounted to 14.806 billion pounds.

Meanwhile, in Lisbon, Portugal's parliament agreed to postpone the vote until 3 November to decide the country's draft budget in 2011. Interest government securities was up 15 basis points to 339 points after the announcement of the delay.

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