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The Taxshift: An EU fiscal strategy to support the inclusive circular economy

The Taxshift: An EU Fiscal Strategy to Support the Inclusive Circular Economy

Type:

Author: 
Femke Groothuis (The Ex'tax Project), Advisors: Peter Gersen, Henk van Cappelle (The Ex’tax Project), Research: Arnoud van der Werf, Raúl van Kleef (The Ex’tax Project), Knowledge partners: Cambridge Econometrics, Deloitte, EY, KPMG, PwC
Publication Date: 
June, 2022
Country: 
Netherlands

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Scope:

The EU Green Deal includes a commitment to shift the tax burden from labour to pollution. EU companies seek to adopt circular practices, but financial incentives in their tax systems curb circular growth.

This study presents a roadmap for a rebalancing of the tax mix, both at national and EU levels. It assesses the impact of 20 taxshift measures significantly decreasing the tax burden on labour while increasing taxation of resource use and pollution.

The analysis shows that a well-considered, broad-based tax reform could lead to more jobs, higher economic growth, fewer emissions and less dependence on imports. It also shows that it is possible to design policy measures addressing environmental issues (Polluter Pays Principle) and social issues (leaving no-one behind) simultaneously.