Donato Raponi: Tax Harmonisation in the EU Requires Balance – Proper Implementation of the Rules Is Key

The statement implicit tax harmonisation successful the European Union is returning forcefully to the forefront, driven successful portion by the caller directive connected tobacco products. For Donato Raponi, however, the captious contented is not lone the rules that are introduced, but supra each their effectual and accordant implementation successful practice.

With astir 4 decades of acquisition astatine the European Commission, the Italian economist and Partner astatine D. Raponi International Tax Consulting — who besides attended the 11th Delphi Economic Forum — speaks to Naftemporiki astir the limits of harmonisation, the challenges of implementing rules and the risks posed by tax policies that disregard the realities of the economy.

He places peculiar accent connected the ongoing European-level treatment surrounding the taxation of tobacco products, successful airy of the applicable directive projected by the European Commission.

“The EU indispensable acceptable boundaries — not modulate everything”

The treatment astir a much unified tax model within the EU is erstwhile again gaining momentum, yet Donato Raponi draws wide boundaries.

“The European Union should relation arsenic a level playing field. It should acceptable the basal limits and intervene lone when there are distortions successful contention oregon problems affecting the functioning of the single market,” helium stresses.

As helium explains, afloat harmonisation is not ever the answer. “If such problems bash not exist, why harmonise everything? Member states should clasp flexibility.”

The European Commission itself, helium adds, present appears to recognise the request for little bureaucracy, and adjacent for the “correction” of erstwhile interventions, peculiarly successful the country of compliance.

Greece: Progress made, with implementation the adjacent step

Drawing connected his idiosyncratic cognition of Greece — and his household ties to the country, arsenic his wife is Greek — Raponi acknowledges the important advancement achieved successful caller years.

“Greece has made substantial progress, peculiarly thanks to digitalisation. The adjacent large step is adjacent much accordant implementation of the rules successful mundane practice,” helium notes.

He besides recalls a study helium wrote some 30 years agone connected the Greek tax administration, which helium describes arsenic “very negative”. Today, however, the representation has improved considerably.

Tobacco and taxation: “Overtaxation leads to a shadiness economy”

Raponi is peculiarly outspoken connected the contented of tobacco taxation, focusing connected the applicable European directive presently under discussion. He criticises an attack that does not sufficiently differentiate taxation betwixt traditional and alternate products.

“If you bash not tax little harmful products astatine a little rate, you supply nary inducement for consumers to switch,” helium underlines.

He cites Sweden arsenic an example, where differentiated tax treatment contributed to a important simplification successful smoking-related deaths.

By contrast, excessive taxation tin nutrient the other effect. “When you summation taxes excessively, you strengthen the amerciable marketplace and ultimately suffer revenue.”

His notation to France is telling: “More than 50% of the marketplace is present illegal.” And this, helium notes, besides creates risks for nationalist health.

“Compliance indispensable beryllium easy”

According to Raponi, simplicity is the cornerstone of an effectual tax system. “Compliance is not voluntary — it is mandatory. But it indispensable beryllium easy. If it is not, citizens will not comply,” helium says.

In this area, digitalisation is simply a important tool, provided it is used to facilitate alternatively than load businesses. Despite the remaining weaknesses, his last connection for Greece is simply a affirmative one. “Compared with 30 years ago, the advancement has been substantial. There are reasons to beryllium optimistic,” helium concludes.

As the European-level treatment makes clear, the nonsubjective remains straightforward: little bureaucracy, greater stability and — supra each — a state that applies the rules consistently.