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Sustainability-oriented future EU funding: a financial transaction tax

Author

Listed:
  • Veronika Solilová

    (Mendel University)

  • Danuše Nerudová

    (Mendel University)

  • Marian Dobranschi

    (Mendel University)

Abstract

Although responsibility for realizing the Europe 2020 strategy is shared between the EU and its 28 member states, the main criticism of the current EU budget relates to the lack of a link between the budget and the Europe 2020 strategy. Therefore the paper focuses on a new budget design as well as alternative revenue sources. One of the possible candidates is a financial transaction tax (FTT). To research FTT revenue potential, a model based on a remittance system was designed. We analyse full or partial replacement of VAT- and GNI-based own resources by the transfer of tax revenues from a FTT raised on the national level to the EU budget. The research reveals that FTT-based own resource would be able to fully replace GNI-based own resource only for some EU member states; however, VAT-based own resource can be fully replaced by a FTT-based own resource for the entire EU. Further, results also show that from the EU11 (28) perspective, the tax is sufficient to fully replace VAT- or GNI-contributions if levied on the EU11 (28) level (not on the national level) as a direct payment to the EU budget without tracking the source member State.

Suggested Citation

  • Veronika Solilová & Danuše Nerudová & Marian Dobranschi, 2017. "Sustainability-oriented future EU funding: a financial transaction tax," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(4), pages 687-731, November.
    • Handle: RePEc:kap:empiri:v:44:y:2017:i:4:d:10.1007_s10663-017-9391-5
    DOI: 10.1007/s10663-017-9391-5
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    References listed on IDEAS

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    Cited by:

    1. Alexander Krenek & Mark Sommer & Margit Schratzenstaller, 2019. "Sustainability-oriented Future EU Funding. A European Border Carbon Adjustment," WIFO Working Papers 587, WIFO.
    2. Atanas Pekanov & Margit Schratzenstaller, 2019. "A Global Financial Transaction Tax. Theory, Practice and Potential Revenues," WIFO Working Papers 582, WIFO.
    3. Margit Schratzenstaller, 2017. "The Next Multiannual Financial Framework (MFF), its Structure and the Own Resources," WIFO Studies, WIFO, number 60722, April.
    4. Veronika Síbrtová, 2023. "Taxation of Financial Institutions in the Czech Republic," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2023(1), pages 1-23.

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    More about this item

    Keywords

    Sustainability; Funding; FTT; European Union; Budget;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems

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