Green taxation : to be used judiciously
An increasing number of political actors have voiced proposals aimed at shifting the fiscal pressure of taxable bases (work, benefits, income, consumption…) to the environmental impact of some goods and activities. essenscia agrees in the broad sense with this principle, but calls for prudence regarding the systematic use of this instrument. Green taxation is not the solution to all economic ills. Companies’ competitiveness should also be taken into account.
Context
According to the European Commission, fiscal pressure in Belgium in 2006 has reached 44.6% of the GDP. Belgium is in third place among Member states with the biggest fiscal pressures in the Eurozone. Green taxation does not offer any real financial opportunity for environmental issues, since structural measures are necessary to ensure constant revenues.
Importance for chemistry and life sciences industries
For the chemical and life sciences industry, high fiscal pressure is often cited as one of the major reasons for Belgium missing out on many investment projects. The exponential growth of local and regional taxes and the non-deductibility of regional environmental taxes have even worsened the problem.
Sector’s position
Previous experience (industry-wide agreements, recycling efforts, consciousness-raising campaigns, voluntary initiatives and voluntary commitments) has clearly shown that instruments other than green taxation are often more effective for reaching environmental goals. If green taxation is considered, it should be within the European context, to avoid or to compensate for lost competitivity of the companies.
Recommendations
If the choice is made to make taxation greener, the following conditions should at least be respected:
• scientific justification for political choices, without discrimination ;
• awareness of the socioeconomic consequences ;
• simplicity, effectiveness and proportionality in the chosen instrument ;
• attention given to potential consequences to public finance (for example, what will happen if a tax erodes a tax base);
• transparence in the allocation of new budgetary revenues.
As far as regional taxes are concerned, essenscia requests the removal of their non-deductibility.
Contact :
Marc Vandeplas, mvandeplas@essenscia.be , tel 02 238 97 63