BUDAPEST, Hungary--(BUSINESS WIRE)--In a rapidly changing global economy, smart taxation is essential to drive growth and economic prosperity. However, the European Union (EU) continues to fall behind as it persists with a one-size-fits all taxation system. This year’s GLOBSEC Tatra Summit hosted a Focus Group, bringing together international experts, looking to reshape and support a smarter European tax policy that will fit national needs.
The Focus Group “Smart taxation in a fast-changing Global Economy” recognised the importance of EU policy-makers to ensure the adoption of smart taxation models that empower member states to address their current economic challenges.
Following a debate in which leading experts presented best-practices across Europe, it became clear that one-size-fits all taxation approach across the EU is doomed to failure.
Csaba Faragó, Head of Foreign Affairs at Századvég Foundation in Budapest, concluded ”the harmonisation of taxes across Europe limits the competitiveness between member states, but also businesses. National governments need to have flexibility in adapting the tax models that are specific to their circumstances without being drawn in an approach dictated top-down by the EU.”
Successful taxation models presented during the Focus Group showed that fiscal authorities need to carefully design a tax model based on predictability and stability in order to allow businesses to grow and be competitive, but also on flexibility to adapt it to national needs.
“EU should promote predictability in taxes, flexibility and foster innovation by decreasing the cost or providing tax benefits for innovative activities,” said Faragó.
The panel discussed growth-friendly policies such as the one promoted by the Hungarian authorities which provided a fixed-rate tax of low tax-bracket enterprises for small businesses, individual entrepreneurs and freelancers engaged in intellectual occupation incentivizing them to be part of a legal system, instead of a more profitable, but black market.
Smart taxation also means predictability, enforceability and competitiveness, along with fair treatment of all EU Member States. Price differentials for consumers goods are normal because they represent the varying income levels and cost of living across the EU.
“The excise per pack of cigarettes in Hungary is almost four times lower than the one in Ireland, for example. However, when cigarette excise is expressed in purchasing power parity terms, which adjusts for the price of other products and services in each country we get a very different picture: Hungary has instead one of the highest tax rates in Europe. And for these reasons, one would never expect the price of consumer goods to be equalised across the EU,” expert Csaba Faragó underlined.
This Focus Group offered an important opportunity for experts across Europe to provide decision-makers and key stakeholders on tax policy with new, appropriate ideas to make smart taxation a reality of the European Union.
Notes to the editor
About GLOBSEC Tatra Summit
Tatra Summit is one of GLOBSEC’s flagship projects. The Summit is organised annually and provides the opportunity for experts to have fruitful political discussions on the future of Europe. The Focus Group “Smart taxation in a fast-changing Global Economy” took place on 12 October 2019 from 8.30 to 10 a.m.
More detailed information is available on the official site: https://tatrasummit.globsec.org/