European taxpayers, advisers and politicians attending a conference discussing the Commission's green paper on the future of VAT heard how removing exemptions would make the tax more efficient and raise revenue, but the political will is unlikely to be there to implement such a controversial measure.
In his keynote speech, José Manuel García-Margallo Y Marfil, vice-chairman of the Economic Affairs Committee of the European Parliament, told the conference in Milan that businesses in similar situations carrying out similar activities should be subject to the same rate.
García-Margallo suggested that reducing exemptions is preferably to raising rates and pointed to three types of exemptions that could be looked at: those for the financial sector, those that exist prevent VAT interfering with other taxes and those used for social reasons, such as excluding the healthcare sector.
