EU considers new taxes as it scratches its head over the budget funding shortfall from Brexit

Helen Cahill
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Brexit poses a funding problem for the bloc (Source: Getty)

The European Commission is considering new taxes for EU members to fill the funding gap that will emerge when the UK exits the bloc.

The UK was the second largest net contributor to the EU budget in 2015, providing £12bn.

Read more: Carney: Tighter policy needed if businesses look through Brexit uncertainty

When the UK leaves the EU, the bloc will have to carry out the politically onerous task of finding that money somewhere else.

In a report on the future of EU financing, the European Commission said: "The gap in EU finances arising from the United Kingdom's withdrawal and from the financing needs of new priorities need to be clearly acknowledged."

The report suggests that the new funding could come from common energy or environmental taxes, which would be applied to make sure there is a "level playing field" for companies contributing to fight climate change.

Alternatively, the common corporate tax base or financial transaction taxes could be used to plug the hole left behind by Brexit.

The Commission also suggested that money generated from EU policies could be used to contribute to the EU budget. These might include revenues from auctions under the EU's emissions trading scheme, or fees collected from the tourists through the EU visa system.

"The withdrawal of the United Kingdom will signify the loss of an important partner and contributor to the financing of EU policies and programmes," the report said.

"However, it also presents an opportunity for a vital discussion about the modernisation of the EU budget."

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