At an extraordinary sitting held on 10 June 2011, the Committee on European Affairs and Oversight of the European Funds (CEAOEF) reviewed the proposal for a Council Directive restructuring the Community framework for the taxation of energy products and electricity СОМ (2011)169 of 13April 2011. The Directive is listed as Article 7 on the Annual Working Agenda of the National Assembly for 2010, but a delay on the part of the European Commission postponed the discussion of the proposal in the Member-States.
The proposal amends Council Directive 2003/96/ЕC, which defines the taxable energy products and specifies the minimum levels of taxation applicable to each depending on whether it is used as a propellant, for certain industrial and commercial purposes or heating. The revision of the energy sources’ tax treatment intends to restructure and align the rules which regulate their taxation and to eliminate the Internal Market distortions caused by the overlaps in the existing provisions. In addition, the Directive also seeks to enhance the energy efficiency of the European Economy in accordance with the priorities set by the new Economic Governance of the European Union.
In regard to the rights granted to the Member States by the Treaty of Lisbon, national parliaments have the chance to actively participate in the EU decision-making process by raising objections to certain European legislative proposals when the latter are not compliant with the subsidiarity principle. In relation to the proposal amending Directive 2003/96/EC, CEAOEF deems that some of the provisions of the so-formulated draft act do not comply with this principle. The Committee supports the Commission’s desire to increase the energy efficiency of the EU economy. However, it sees the proposal as a challenge that could weaken the competitiveness of the European economy in comparison with the other players on the World scene. Furthermore, CEAOEF believes that the implementation of the suggested revisions could have a negative effect on the Bulgarian economy in several aspects: decreasing the competitiveness of the Bulgarian businesses, creating potential inflationary pressures, increasing the redistributive role of the State, etc. The proposed minimum taxation levels can also be seen as a challenge for the national fiscal policy of the Member-States. Given the abovementioned concerns, CEAOEF rejects the proposal for a Directive under the subsidiarity principle.
Although the proposal does not exceed what is necessary to achieve the objectives of the Treaties, CEAOEF recommends the elaboration of an additional assessment of the administrative and financial costs generated by the Directive and expresses the following considerations in relation to the proportionality principle: the European Commission Impact Assessment is not thorough enough and does not provide sufficient justification for all of the proposed changes; there is a risk of an increase in the redistributive role of the State which contradicts the strategic priorities of our country; The Bulgarian business might not have the resources and capacity to catch up with the old Member-States’ energy efficiency in the mid-term.
The proposed Directive was also reviewed by the Budget and Finance Committee. After serious discussions in the parliamentary committees, the Bulgarian National Assembly’s Reasoned Opinion was sent to the Presidents of the European Commission, the European Parliament and the Council within the determined 8-week period. It is expected that it will be taken into consideration in the further discussions of the Directive.
This is the second Reasoned Opinion in relation to the subsidiarity checks on the European legislative proposals. They were issued by the Bulgarian National Assembly via CEAOEF in compliance with the procedures stipulated in the Lisbon Treaty. The first such opinion was issued in May 2011 on the proposal for a Common Consolidated Corporate Tax Base Council Directive. These opinions demonstrate the increasingly active position of the Bulgarian National Assembly to keep the national interests secured on the topics related to the New Economic Governance in Europe.
CEAOEF’s issued Reasoned Opinions on the European draft acts, included in the Annual Working Agenda of the National Assembly on the issues of the EU for 2011, can be found at: http://parliament.bg/en/grp2011