Plan to hike EU taxes draws stiff opposition

European Commission President Ursula von der Leyen faces strong resistance over her proposed 2-trillion-euro ($2.3-trillion) budget plan, which calls for new taxes on major corporations, tobacco and electronic waste.

The proposal, effectively a 64-percent rise in spending for the period 2028-34, sets the stage for an intense political struggle over the European Union's future priorities.

Under the plan, defense spending would rise fivefold, border and migration funding would triple, and research would double, including a 35-percent hike guaranteed for climate and nature programs, reported The Guardian newspaper.

The EU budget draws primarily from national contributions, with wealthy nations paying more, plus various taxes collected directly by Brussels, the Financial Times newspaper explained in its analysis of von der Leyen's plan.

The commission's new proposal introduces several "own resources" or revenue streams expected to generate 58 billion euros annually, totaling more than 400 billion during 2028-34.

New levies would target companies with 100 million yearly turnover, plus new taxes on electronic waste disposal, fees for air freight packages, and higher duties on tobacco products.

But this still leaves approximately 400 billion to be found compared to current budget allocations of 1.2 trillion euros, according to the analysis.

Commission officials explain that member states' contributions will match their end-of-cycle payments in the current budget, which are higher than initially agreed due to previous years' carry-overs.

The commission forecasts EU countries will collectively contribute 186.2 billion euros in 2027, with approximately 1.3 trillion euros expected for the next budget cycle.

This calculation allows von der Leyen to assert that "member states contributions will remain constant as we propose a step change in the new own resources".

EU officials and diplomats immediately challenged the commission's budget calculations. One finance ministry official, quoted by the FT, said: "It will make sense if you believe that money will fall from the sky. But these new own resources will never happen."

During Wednesday's presentation to member states, ambassadors dismissed the near-doubling as "highly problematic and unjustified", with one ambassador calling it "voodoo maths", according to people briefed on the discussions.