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Future of the European Union’s Budget revenues – New own Resource based on Value added Tax

Author Affiliations

  • 1Poznan University of Economics, Al. Niepodległości 10, 61-875 Poznań, POLAND

Int. Res. J. Social Sci., Volume 4, Issue (10), Pages 11-16, October,14 (2015)

Abstract

Current legal regulations concerning European Unions budget revenues are considered to be exceedingly complex and unclear both for professionals and citizens of the European Union countries. The main reason of the indicated problem is connected to the resource based on the value added tax and the own resource based on gross national income. This situation led to intensive work on the new own resources of the EU that would ensure financial autonomy in order to operate efficiently. Therefore, European Commission proposed two new types of revenues financial transaction tax and new own resource based on VAT. The aim of this article is to present the new VAT-based revenue of the EU budget. Apart from the legal issues empirical analysis will be taken into consideration in order to examine whether new resource can be perceived as a stable source of EU revenues. Presumption of the impact of the economic situation on the VAT amounts collected by EU Member States is supported by recent financial crisis that affected majority of the European Union Countries. The analysis is carried out using linear regression model, where aggregated VAT revenues of EU are treated as dependent variable while aggregated gross domestic product of EU are used as explanatory variable. The study is conducted for years 2004-2012.

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