Project

Member of University of Ljubljana 

School of Economics and Business

Code

V5-2261

Project

Modelling payments of new EU own resources by member states

Period

1. 10. 2022 - 30. 9. 2025

Head

Vasja Rant

Research activity

Social sciences/Economics

Research organisation

/

Abstract

The subject of the project is to develop a model for estimating the distribution and projection of payments of new own resources of the EU budget by EU Member States for the first package proposed by the European Commission on 22 December 2021 and for the second package to be proposed by the European Commission by the end of 2023. The main purposes of calculating new resources of own resources are to support the decisions of the Republic of Slovenia in negotiations on new own resources in the Council of the EU and to facilitate informed budget planning of the Republic of Slovenia. The results of the project also have the potential for professional and scientific publications. The project will pursue three objectives. 

The first objective is to assess the bases for the payment of new own resources by individual own resources in the context of the published proposal of the first package and the expected proposal of the second package of new EU own resources by EU Member States. 

The second objective is to develop a basic simulation model of new own resources from the proposals of the first and second packages (until 2023 inclusive) for all EU Member States in Excel on the basis of publicly available data and data provided by the Ministry of Finance, including internal and technical documents of the European Commission, the European Council and the Council of the EU. The simulation model will make it possible to change the assumptions about the call rates for new own resources and about the methods of calculating the bases for the payment of new own resources. 

The third goal of the research project is ongoing upgrades and adjustments of the basic simulation model of new own resources for all EU Member States in Excel in accordance with new and amended proposals of the European Commission, European Council and the Council of the EU, which would take place in the context of the legislative process.

Researchers

sicris.si

The phases of the project and their realization
The implementation of the project is divided into two working packages:

- Working package 1 (WP1) refers to the first package of new sources of own resources, which the Commission proposed on 22 December 2021. Within the framework of WP1, a component of the model will be created to assess the distribution and projections of payments from :

• Sources based on revenues from emissions trading within the EU greenhouse gas emissions trading system (ETS source)
  
  
• Sources based on revenues generated by the proposed EU Carbon Border Adjustment Mechanism (CBAM source)
  
  
• Sources based on the redistributed share of the residual profits of multinational enterprises based on the agreement between the countries of the OECD/G20 inclusive framework

- Working package 2 (WP2) refers to the second package of new sources of own resources. In the framework of WP2, a component of the model will be created to assess the distribution and projections of payments from the sources that the Commission is expected to propose by the end of 2023. This could presumably include:

• Source based on revenue from financial transaction tax
• A revenue-based source associated with the corporate sector

Each working package is further divided into four phases:

- Phase 1: Review of legislation, implementing acts and technical documents related to proposed new sources of EU own resources and other documents to be provided by the Ministry of Finance for individual sources (ETS, CBAM, OECD/G20 and planned sources of the second package).

- Phase 2: Review of professional and scientific literature on the subject of new sources of EU own resources and simulations of the bases for payment of individual sources (ETS, CBAM, OECD/G20 and anticipated sources of the second package).

- Phase 3: Collection of data from publicly available databases (AMECO, EUROSTAT, ECB, WB, IMF, OECD, EEA) and other data to be provided by the Ministry of Finance for individual sources (ETS, CBAM, OECD/G20 and projected sources) of the second bundle).

- Phase 4: Design of the model component for individual sources (ETS, CBAM, OECD/G20 and projected sources of the second package) with assessment of the bases of each source by EU member states, projections of the bases and the possibility of simulations based on changes in the key parameters of the model component.

The tentative timetable based on the division described above is as follows:

- WP1, Phase 1: October 2022 – June 2023 (project start)

- WP1, Phase 2: October 2022 – June 2023

- WP1, Phase 3: January 2023 – June 2023

- WP1, Phase 4: April 2023 – October 2024

- WP2, Phase 1: October 2023 – June 2024

- WP2, Phase 2: October 2023 – June 2024

- WP2, Phase 3: January 2024-June 2024

- WP2, Phase 4: April 2024 – October 2025 (end of project)

Above listed tentative timetable can be adjusted based on the client’s needs due to changes in considered topics and new own resources on EU level. Timetable of the project is closely related to the dynamics of the progress of technical discussions in the Council of the EU on the proposed first package of new EU own resources from 2021 and the time of publication of the proposal for the second package, which is expected in 2023. The timeline also depends on the outcome of the negotiations on the legislative package

Citations for bibliographic records
1. Cobham, A., Jansky, P., Jones, C. & Temouri, Y. (2021). An evaluation of the effects of the European Commission’s proposals for the Common Consolidated Corporate Tax Base. Transnational Corporations 28(1), 29-50

2. Čok, M., Cirman, A., Prevolnik Rupel, V., Rant, V., Gabrijelčič. I., Kump. N., Porenta, J., Bartol Lesar, M. (2021). Javne finance v Sloveniji. Ljubljana: Ekonomska fakulteta

3. Dobranschi, M., Nerudova, D. & Solilova, V. (2017). Future EU Funding: a Case of Lump-Sum Tax. Engineering Economics, 28(4), 376-385

4. Heinemann, F., Mohl, P. & Osterloh, S. (2009). Who's afraid of an EU tax and why? Revenue system preferences in the European Parliament. Review of international organizations, 4(1), 73-99

5. Krenek, A. & Schratzenstaller, M. (2017). Sustainability-oriented tax-based own resources for the European Union: a European carbon-based flight ticket tax. Empirica, 44(4), 665-686

6. Nerudova, D & Dvorakova, V. (2014). The Estimation of Financial Transaction Tax Revenues as a New Own Resource of European Union Budget. Ekonomicky Časopis, 62(9), 945-958

7. Nerudova, D. & Dvorakova, V. (2014). Financial Transaction Tax: Can it be sufficient resource of EU budget when introduced through enhanced cooperation? 17th International Conference Enterprise And Competitive Environment 2014. 453-461

8. Nerudova, D., Solilova, V. & Dobranschi, M. (2017). Sustainability-Oriented Eu Taxes: Revenue Potential Of Ccctb. Finance And Performance Of Firms In Science, Education, And Practice. 716-724

9. Palenik, V. & Miklosovic, R. (2018). Concept of Environmental Taxes as EU's Own Resource and CGE Modelling of its Effects on Slovakia. Ekonomicky Časopis, 66(3), 268-285

10. Schratzenstaller, M., Krenek, A., Nerudova, D. & Dobranschi, M. (2017). EU Taxes for the EU Budget in the Light of Sustainability Orientation - a Survey. Jahrbucher Fur Nationalokonomie Und Statistik, 237(3), 163-189

11. Solilova, V. & Nerudova, D. (2014). Determination of Revenue Potential of Financial Transaction Tax and its consideration as own resource of the EU budget. European Financial Systems 2017: Proceedings Of The 14th International Scientific Conference. 295-302

12. Solilova, V., Nerudova, D. & Dobranschi, M. (2017). Sustainability-oriented future EU funding: a financial transaction tax. Empirica, 44(4), 687-731.

Research project is (co)funded by the Slovenian Research Agency and by the Ministry of Finance