Academic journal article Journal of Accountancy

EC Tax Commissioner Sets Priorities

Academic journal article Journal of Accountancy

EC Tax Commissioner Sets Priorities

Article excerpt

EC TAX COMMISSIONER SETS PRIORITIES

The European Community's priorities for harmonizing members' tax systems were discussed by Christiane Scrivener, the EC commissioner for tax and financial policy, at an American Enterprise Institute conference. Acknowledging that resolving differences in member nations' tax policies "remains one of the thorniest issues left on the table," she listed three top priorities.

The first is to reduce differences in indirect tax rates, such as value-added taxes, to eliminate customs checkpoints, border controls and other barriers to active trade between member states. The Commission is trying to bring current VAT rates into two bands, one ranging from 14% to 16% and the other from 4% to 9%. In its deliberations, it has been influenced by the U.S. state sales tax system, in which differences of several percentage points sometimes exist between neighboring states. Scrivener noted that the U.S. system "suggests that some differences can be accommodated, but they need to be limited in scale."

A second priority is to guard against tax evasion stemming from liberalizing capital flows from one member state to another. …

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