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Reforming the EU’s Budget Revenue: The case for a visible VAT-based resource

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  • Cipriani, Gabriele

Abstract

This paper finds that the long-awaited reform of the EU’s revenue arrangements can be pursued within the current legal framework, thus keeping member states’ fiscal sovereignty unaffected. In order to have a chance of approval by national parliaments, the author recommends that reform options should concentrate on known grounds and operational solutions. These include providing a reliable estimate of potential revenue and expected burden sharing as compared with the current arrangements. A key issue is whether the EU budget should be financed by a visible fiscal source. Making citizens directly liable for funding the EU budget would represent a major political decision. This study argues that the value added tax provides an operational solution to ensure the visibility of EU contributions without increasing the overall tax burden. Since EU revenue and expenditure are set as a comprehensive package, there is also a need to consider the extent to which the current spending programmes provide the best value and achieve objectives of common interest with demonstrable results. Such assessment should inspire the proposal for the multiannual financial framework after 2020, to be presented by the Commission in about a year’s time.

Suggested Citation

  • Cipriani, Gabriele, 2016. "Reforming the EU’s Budget Revenue: The case for a visible VAT-based resource," CEPS Papers 11979, Centre for European Policy Studies.
    • Handle: RePEc:eps:cepswp:11979
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    File URL: https://www.ceps.eu/system/files/SR150%20GC%20EU%20Budget%20Financing.pdf
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    References listed on IDEAS

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    1. Clemens Fuest & Friedrich Heinemann & Martin Ungerer, 2015. "Reforming the Financing of the European Union: A Proposal," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 50(5), pages 288-293, September.
    2. Ferrer, Jorge Núñez, 2012. "Investing where it matters: An EU Budget for Long-Term Growth," CEPS Papers 6648, Centre for European Policy Studies.
    3. Massimo Bordignon & Simona Scabrosetti, 2016. "The Political Economy of Financing the EU budget," Working papers 42, Società Italiana di Economia Pubblica.
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    Cited by:

    1. Kawecka-Wyrzykowska Elżbieta, 2020. "Assessment of the European Commission's proposals for financing the EU budget in 2021–2027," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 56(3), pages 193-208, September.

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