Page last updated at 17:02 GMT, Tuesday, 19 October 2010 18:02 UK

Commissioner proposes EU VAT

Budget Commissioner Janusz Lewandowski has confirmed that he is considering the introduction of an EU-wide VAT.

Presenting his budget review to the European Parliament on 19 October 2010 he said there should be "no taboo areas" in looking at future funding for the EU.

The review sets out how the EU could raise and spend its finances after the current financial framework ends in 2013.

Direct contributions by EU member states currently make up 70% of EU funding, something that Mr Lewandowski says is "against the spirit of the Treaties".

The review contains the possibility of EU charges on air transport, a separate EU VAT or an EU corporate income tax.

The proposals have already been rejected by a number of member states - including the UK - but his plans were broadly welcomed by many MEPs in the Parliament.

Leader of the centre-right group Joseph Daul said it was a "welcome new approach" and that Europeans had the right to know where their money was being spent.

Meanwhile liberal group leader Guy Verhofstadt blamed the British rebate for the lack of EU "own resources"

Read more here at Democracy Live's guide to the European Parliament plenary sessions.

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