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European response for coronavirus-related losses

Author : Vyacheslav Cherkashyn

Source : www.facebook.com

On July 21, 2020, EU leaders agreed on a budget framework for 2021-2027, which includes a multiannual financial framework in the amount of 1.07 trillion euros and a recovery fund called Next Generation EU
09:38, 24 July 2020

www.consilium.europa.eu/en

On July 21, 2020, EU leaders agreed on a budget framework for 2021-2027, which includes a multiannual financial framework in the amount of 1.07 trillion euros and a recovery fund called Next Generation EU (NGEU), with the possibility of borrowing on seven programs worth € 750 billion and a repayment schedule by 2058.

Related: Ukraine's coronavirus fund runs desperately low?

Of these amounts, 390 billion will be distributed in the form of non-repayable grants to EU member states and 360 billion in loans. At the same time, 30% of total expenses will be directed to climate-related projects.

However, someone needs to pay for the "feast during the plague" and the European bureaucracy has already announced the first "victims".

Related: Ukraine’s ombudsman asks to allocate over $500,000 from COVID-19 fund

A tax on plastic waste is introduced from January 1, 2021, to finance NGEU. It is assumed that the tax will be collected at a rate of 0.8 euros for each kilogram of unrefined plastic waste. There are already first assessments of its impact on individual countries. So, if the UK had not left the EU, the tax would have amounted to 398 million euros.

In the first half of 2021, new taxes (their analogs) will be developed:

- within the framework of the carbon border adjustment mechanism, the details of the introduction of a special type of import duty will be announced, its principle is to charge for goods, imported into the EU based on emissions that arise from their production from jurisdictions that apply less stringent rules to combat climate change. The term of introduction is no later than 01.01.2023;

- finally decide on the introduction of a special tax, which tentatively covers only large companies in the form of 0.1% of turnover (it is planned to collect 10 billion);

- tax on air and sea transportation (for the first - 12 euros per ticket, and they will also charge a fee for each kilogram of baggage);

- a more distant prospect - the Financial Transaction Tax, which includes a 0.1% rate for transactions with all types of financial instruments and a reduced rate of 0.01% for certain types of derivatives.

In Ukraine, the debate about who will pay the Covid-19 bills has just begun. The Minister of Finance is already planning, regardless of the economic situation, to collect an additional 215 million USD in taxes every month with an annual prospect of closing the deficit of 1,58 billion USD.

Related: Only 15% of Ukrainian Covid-19 fund is allocating to healthcare, - StateWatch

It is clear that no shadow economy will pull this out, and the legal sector will have to fork out. The first signs are already there - by July 1, 2021, the minimum wage will be raised 233 USD (+ 38%), which will previously cost employers more than 180 million USD in taxes.

In other words, the vicious approach to tax collection remains unchanged, when the amount of withdrawals is provided not by economic growth and the state of the economy, but by the needs of budget expenditures.

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