How fairer tax policy could achieve stability and solidarity

EU-funded researchers believe that better coordinated tax regimes will increase economic stability and prevent a damaging race to the bottom, where countries compete for the lowest tax rates.

Countries
Countries
  Algeria
  Argentina
  Australia
  Austria
  Bangladesh
  Belarus
  Belgium
  Benin
  Bolivia
  Brazil
  Bulgaria
  Burkina Faso
  Cambodia
  Cameroon
  Canada
  Cape Verde
  Chile
  China
  Colombia
  Costa Rica
  Croatia
  Cyprus
  Czechia
  Denmark
  Ecuador
  Egypt
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  Faroe Islands
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Countries
Countries
  Algeria
  Argentina
  Australia
  Austria
  Bangladesh
  Belarus
  Belgium
  Benin
  Bolivia
  Brazil
  Bulgaria
  Burkina Faso
  Cambodia
  Cameroon
  Canada
  Cape Verde
  Chile
  China
  Colombia
  Costa Rica
  Croatia
  Cyprus
  Czechia
  Denmark
  Ecuador
  Egypt
  Estonia
  Ethiopia
  Faroe Islands
  Finland
  France
  French Polynesia
  Georgia


  Infocentre

Published: 19 July 2018  
Related theme(s) and subtheme(s)
International cooperation
Research policyHorizon 2020
Science in societyGovernance
Countries involved in the project described in the article
Austria  |  Brazil  |  Canada  |  Czechia  |  Denmark  |  Ireland  |  Norway  |  Sweden  |  United Kingdom
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How fairer tax policy could achieve stability and solidarity

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© adrian_ilie825 #211500901, source: fotolia.com 2018

The EU-funded FAIRTAX project, which is carrying out a comprehensive review of EU fiscal policy, is using its findings to put forward a series of recommendations on tax issues. One recommendation is that legislators should address these issues more positively.

“Policymakers should concentrate on active measures to encourage tax compliance rather than focus on the distortive effects of tax regulations,” says project coordinator Åsa Gunnarsson from Umeå University in Sweden. “Our findings also reaffirm the importance of traditional revenue sources, such as income tax and corporate tax, but recognise the potential of other tax bases, too, like wealth-related taxes, value-added taxes and environmental taxes.”

One suggestion FAIRTAX researchers have put forward is an EU-wide carbon tax on flight tickets. At the same time, this links taxation with a central aim of the EU’s Europe 2020 strategy: promoting smart, inclusive and sustainable growth in the EU.

“A key message from the project would be that in order to fight climate change and promote equality, policymakers should concentrate on the tax base issue,” says Gunnarsson. “This message will hopefully be one of the project’s key long-term impacts.”

Recent project discussions with stakeholders in Brussels also confirmed the benefits of a holistic and collaborative approach to sensitive issues such as tax competition and corporate taxation. “We think there is much to gain if tax policy interaction between Member States and the EU could be increased, considering that taxes are one of the most efficient instruments to achieve social and welfare policy outcomes,” says Gunnarsson.

This would help to address the issue of divergences in national tax laws and the difficulties in enforcing cross-border transactions. Although the EU is the world’s largest economic bloc, limited tax harmonisation can allow international companies to decide where to base their offices according to which country offers them the best tax deal.

The FAIRTAX project aims to address the burden on citizens and companies which may result from this apparent lack of solidarity. The project ends with a final conference in Brussels in February 2019.

Project details

  • Project acronym: FAIRTAX
  • Participants: Sweden (Coordinator), Norway, Denmark, UK, Ireland, Austria, Czechia, Canada, Brazil
  • Project N°: 649439
  • Total costs: €2 889 000
  • EU contribution: €2 472 750
  • Duration: March 2015 to February 2019

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