The European Union needs to consider the possibility of joining the international agreement on the minimum corporate tax without Hungary, according to a draft joint resolution released by five European Parliament (EP) parties. Protesting Hungary’s opposition to the tax plan, the parties suggest that the EU simply exclude Hungary and join the agreement anyway, reports Népszava.
EP representatives plan to vote on the issue on Wednesday, writes the Hungarian daily. In future matters, the resolution proposal recommends getting around the Hungarian veto by ending the policy of unanimous agreement on tax issues and transitioning to qualified majority voting, noting that the EU Treaties still provide for this possibility in certain cases.
137 countries have already agreed to a Organisation for Economic Co-operation and Development (OECD) plan to implement a global minimum corporate tax rate of 15%. The EU had intended to join this agreement as a unified body, requiring the consent of every Member State.
Hungary initially indicated its intention to sign on to the agreement, but then abruptly withdrew its support.
The Orbán government pointed to economic reasons for its change of heart, but few political groups in the EP apparently believe this, and in the draft resolution they call on the relevant EU institutions not to engage in political bargaining with Member States who abuse their national veto rights.
With a 15% minimum tax rate, the EU could increase its corporate tax revenues by €64 billion (US $65.7 billion) annually. However, Hungary’s veto threatens to perpetuate harmful tax practices and social injustices, reads the document issued by the Christian Democrats, Socialists, Liberals, Greens, and the extreme left. [Magyar Hang]