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State aid rules override tax sovereignty – Alfred Sant

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State aid rules override tax sovereignty - Alfred SantFormer Prime Minister Alfred Sant told the European Parliament that applying state aid rules to the tax policies of member states may help to combat tax avoidance, but it overrides the tax sovereignty that member states still have under the treaties.

“The flexibility of member states in setting their tax policies has to be confirmed. There should be concern about a competition policy that is administered through an agency which defines such policy, investigates alleged breaches, and itself decides on them, with the power to set fines,” said Sant.

The Maltese MEP, speaking on the ‘Annual Report on EU Competition Policy,’ emphasised that competition rules especially for state aid, should not be applied on a one-size-fits-all basis.

“During this mandate, the need is arising to highlight new precautionary signals. Given the ongoing current political and economic changes, in Europe and beyond, competition policy needs to be kept under constant review. If Europe is going to be more Catholic than the Pope, it risks losing competitive edge on a global scale,” remarked Dr Sant.

Dr Sant said European competition policy should avoid the appearance of a frontal contest with other administrations, via the application of huge two-way fines on a tit for tat basis.

The Maltese MEP submitted 18 amendments to the Report in the context of the need for more tailor-made application of state aid rules, especially in the context of state aid on services of general economic interest, including transport, for islands within the European Union.

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