European Council President Calls for New EU Taxes Not Already Levied by National Governments

Why New EU Taxes Must Avoid National Overlap

António Costa, President of the European Council, said national governments are more likely to support new EU-wide taxes for the bloc’s next seven-year budget if those taxes target revenue streams not currently collected at the national level. He made the remarks during an interview with POLITICO following a tour of 25 European capitals, where he consulted leaders on fiscal priorities for the upcoming EU budget cycle. Costa emphasized that gaining political backing for EU taxes requires demonstrating they fill gaps in national tax systems rather than duplicating existing efforts.

Costa explained that member states resist EU tax proposals when they perceive them as encroaching on sovereign fiscal authority or creating double taxation. By focusing on areas where national governments do not already levy taxes—such as certain digital services, financial transactions, or environmental externalities—the EU can present a clearer case for added value. He noted that his capital tour revealed broad agreement on the need for greater EU fiscal capacity, but deep skepticism about mechanisms that appear to override national budgetary autonomy. The goal, he said, is to design taxes that are both politically palatable and economically justified, ensuring they complement rather than conflict with national policies.

How Could the EU Gain Consensus on Untaxed Bases?

The European Council President suggested that consensus could emerge around taxing activities with clear cross-border impacts, where unilateral national action is ineffective or leads to race-to-the-bottom dynamics. Examples include digital advertising revenues from large tech platforms, certain freight and logistics emissions, or standardized fees on non-recyclable packaging. Costa stressed that any proposal must be grounded in fairness, transparency, and clear linkage to EU public goods, such as climate action or strategic autonomy. He added that technical assessments are underway to identify viable bases, with input from the European Commission and tax experts across member states.

What types of taxes is Costa proposing for the EU budget? He did not name specific taxes but indicated they should target revenue sources national governments are not already collecting, such as certain digital or environmental activities with cross-border effects.

Frequently Asked Questions

Why does Costa believe national governments would accept new EU taxes? Because such taxes would not duplicate national efforts, reducing perceptions of overreach and increasing the sense that the EU is adding value where national action falls short.

When will these tax proposals be considered for the next EU budget? Discussions are ongoing as part of the preparatory work for the EU’s next multiannual financial framework, expected to cover the period after 2027.