Opinion of the Economic and Social Committee on the "Proposal for a European Parliament and Council Regulation clarifying Council Regulation (EC) No 2223/96 as concerns principles for recording taxes and social contributions"

(2000/C 75/08)

On 14 January 2000 the Council decided to consult the Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Economic and Social Committee decided to appoint Mr Vasco Cal as rapporteur-general for this opinion.

At its 369th plenary session of 26 and 27 January 2000 (meeting of 26 January), the Economic and Social Committee adopted the following opinion by 79 votes in favour with 3 abstentions.

1. Introduction

1.1. The European System of Accounts (ESA) determines Member States' general government net borrowing, i.e. government deficit. This is a key factor in connection with the protocol on the excessive deficit procedure which, in turn, governs the stability and growth pact. The protocol requires that the government deficit of each Member State can be calculated quickly. The figures must also be transparent and comparable.

1.2. In this connection, some Member States declare taxes and contributions which are actually due (according to assessments and declarations), including amounts which will never be collected, i.e. taxes unpaid because of insolvency, bankruptcy etc. Other Member States declare actual cash receipts, which arrive much later.

1.3. The Commission thus proposes that "taxes and social contributions recorded in the system (should) not include amounts unlikely to be collected" and that, "accordingly, taxes and social contributions recorded in the system on an accrual basis, (should) be equivalent over a reasonable amount of time to the corresponding amounts actually received."

1.4. In practical terms, the Commission proposes that each of the recorded categories of taxes and social contributions should be subject to a weighting in order to eliminate sums regularly left uncollected. Where declarations are based on cash receipts, the Commission requires that the amounts relate precisely to the specific time frames and activities concerned.

2. The ESC's comments

2.1. The Committee approves the draft regulation in principle and hopes that it will be adopted by the Council without delay, as far as possible during the current Portuguese presidency.

2.2. The Committee notes that, at around 2 % of GNP, levels of uncollected taxes and contributions are relatively low. Their importance becomes clearer, however, when measured against the cuts - also in the region of 2 % - which Member States are supposed to make to their deficits under their stability and growth plans.

2.3. The Committee urges strict application of the weightings for each category of taxes and social security contributions. A blanket weighting not only compromises the transparency and comparability of figures between Member States, but would also make it more difficult to carry out the research needed to launch a gradual process of tax harmonisation in the European Union.

3. Specific comments

3.1. Article 3 a)

The Committee urges that the coefficients should not only be estimated on the basis of past experience, but should also reflect expected events which may affect the macro-economic context.

3.2. Article 3 b)

The Committee welcomes this provision which ensures that taxes and contributions are related strictly to the particular time frame and activity concerned. Continuity in the application of the principles is vital.

3.3. Enforcement

A transitional period not exceeding two years should be laid down for Member States which do not yet apply the provisions of Article 3 and whose current figures diverge from those that would have been obtained had they done so.

Brussels, 26 January 2000.

The President

of the Economic and Social Committee

Beatrice Rangoni Machiavelli