From rights to VAT

The March issue of Europe Infos opens with an editorial on the exchange of gifts between Europe and Africa (by Piotr Mazurkiewicz), echoed by a contribution on EU development policy for Africa (José Luis Bazán). A great part of the issue is dedicated to economic and social issues (an article on the social responsibility of enterprises, the EU twenty years after Maastricht, the joint value-added tax systems) along with articles on the future of the EU Fundamental Rights Agency, on the European Citizens’ Initiative, on the ambiguities linked to embryo research funding by the EU and on the next Common Agricultural Policy (CAP).The EU Fundamental Rights Agency. The European Commission recently launched its proposal for a future Council Decision establishing a Multiannual Framework for the EU Agency for Fundamental Rights for 2013-2017. In particular "the thematic areas to be covered by the Agency would be enhanced", pointed out Alessandro Calcagno, from the COMECE Secretariat. "A number of themes are obviously reconfirmed, such as access to justice; the rights of the child; racism, xenophobia and related intolerance; migration and asylum; protection of personal data" as well as non-discrimination. Innovative proposals centre on three themes: "integration of Roma communities; police cooperation; and judicial cooperation". The European Parliament, in its Resolution on the situation of fundamental rights in the EU (2009) emphasized the need for the FRA to provide quality, objectivity, effective impartiality and transparency". Measures should be taken to avoid unnecessary duplication by the FRA of the tasks of the Council of Europe. The Agency could also consider playing an active role in raising the awareness of EU citizens. Non-discrimination, (notably handicapped people), religious freedom and the situation of old people could be included in the Agency’s scope of action. European Citizens’ Initiative (ICE). On April 1st the Regulation on the new participatory tool provided for in the Lisbon treaty will come into force. Having collected the required one million signatures from EU citizens of at least seven European countries, underlined Anna Echterhoff, "the ECI brings EU citizens together through the cross-border nature of their discussions on EU issues". The ways in which these initiatives will unfold is yet to be planned; social networks and the Internet will be useful tools, "as they will undoubtedly take centre stage when it comes to spreading the idea of a concrete initiative". The process requires thorough and professional preparation as well as financial resources, so the organisers are obliged regularly to present the Commission with information about the sources of support. The ECI must be given the green light by the Commission prior to collecting pledges of support. According to regulations, the Commission may only reject an ECI if the citizens’ committee has not been set up in line with the rules or if the initiative is clearly being misused, is unsound or causes offence or even violates the values of the European Union, if it is outside the province of the Commission, a point which is hard to establish. It is necessary to wait and see whether the ECI will really change democratic life in the EU. The joint value-added tax system. Value-added tax (VAT) has come under the scrutiny of the Commission for two reasons. On the one hand, harmonisation of the VAT system should contribute to the expansion of the Internal Market", explains Britta Tilgner. "On the other hand, VAT is an essential source of income for the European Union. The EU generates funds of around EUR 14 billion per annum from VAT". In a document containing the results of a public consultation on the revision of VAT regulations published December 2011 the EU Commission "abandoned its decades-long aim to arrange VAT in accordance with the principle of the country of origin". "This was politically unattainable", Tilgner said. "The focus should be on improving the applicable regulations in accordance with the country of destination principle". In the case of tax exemptions for not-for-profit organisations, "the Commission is of the opinion that such organisations already benefit from the tax exemption for activities in the public interest and the exemption for small enterprises". Further compensatory measures in their favour would be a matter for the Member States. The Commission is considering abolishing reduced VAT rates – applied to essential goods and also to leisure activities… – in favour of a lower standard rate. This plan would mark a change from direct taxes towards indirect taxes and low-income groups in the population would be particularly hard hit. From this perspective efficiency of the market is the sole determining factor, which is in conflict with a social market economy, one of the Union’s objectives in the Treaty of Lisbon.