Report of Mr. Letta – ”Much more than a market”

Who is Enrico Letta?

Enrico Letta is an Italian politician who served as Prime Minister of Italy from April 2013 to February 2014. During his tenure, he led a grand coalition of centre-left and centre-right parties. Letta was also the leader of the Democratic Party (PD) from March 2021 to March 2023. His political career spans various ministerial roles, including Secretary of the Council of Ministers and Minister of Industry, Commerce, and Crafts. Letta’s contributions have significantly impacted Italian politics and governance.

Source Wikipedia

The Letta Report, titled “Much more than a Market,” was presented by Enrico Letta on 18 April 2024. This independent report outlines recommendations to strengthen the European Single Market for a sustainable future and prosperity for all EU citizens. Here are some key points from the report:

5th Freedom: Letta emphasizes the need to enhance research, innovation, and education within the Single Market. This includes empowering research infrastructures, creating a European Knowledge Commons, and promoting open science.
Investment Gap: Addressing the investment gap in research and innovation is crucial. Public-private partnerships and increased mobility for researchers and innovators are essential.
Efficient Implementation: The report calls for informed decision-making, effective rule adoption, and simplified regulations to make the Single Market more dynamic.
Beyond Borders: Letta highlights the Single Market’s role in the new geopolitical scenario, trade, enlargement process, and economic cooperation with strategic partners.

Overall, the report aims to unlock the full potential of the Single Market, emphasizing speed, security, and solidarity for EU citizens.

Link to the report

Extract of the report

Making progress in the harmonisation of indirect taxation

Regarding indirect taxation, the Treaties explicitly assign the Union the task of adopting the necessary provisions to prevent national taxes linked to goods and services from hindering their free movement eventually.
As for the value-added tax (VAT) system, harmonisation has been progressing, albeit slowly, for almost four decades now. After years of negotiation, the rules governing VAT rates for goods and services have eventually been revised to ensure that, while Member States have the necessary flexibility to make their VAT systems reflect national policy choices, coherence is maintained with respect to common European priorities. Nonetheless, VAT arrangements in the EU can still be burdensome for businesses, especially for SMEs, scale-ups, and other companies with cross-border operations.
Pending legislative initiatives in the field of VAT must be finalised to address challenges posed by the platform economy, modernise the VAT system, and improve its functionality for businesses, especially micro-enterprises. Furthermore, it is crucial to tackle fraud: according to the Commission’s VAT Gap reports, it still represents a revenue loss for Member States of nearly 100 billion euros yearly. VAT is also the basis for an EU own resource.
Against that background, there is certainly a need to ensure even closer cooperation among Member States and to step-up efforts to guarantee a simple compliance to VAT rules for businesses. Furthermore, the tourism sector, which is intrinsically linked to a cross-border dimension, has been waiting for years for a review of the VAT rules applicable to the activities of travel agents, passenger transport and of the VAT exemption regime for non-EU travellers.
To encourage charitable giving, the EU should consider greater harmonisation of VAT neutralisation options for donations across the Single Market. While EU VAT law allows Member States to establish relief criteria, participation remains inconsistent.
In the area of excises, there is an even wider room for improvement. Economic operators involved in distance selling of excise goods in the EU complain of highly obstructive barriers, which disproportionately affect SMEs, such as small wine producers. Also, the directive governing excise taxes on energy products is now more than 20 years old and does not take into account the significant developments in the energy market nor the climate goals that are now so high on the agenda of the European Union. The complex patchwork of exemptions and reductions that has proliferated across Member States must be reorganised in order to level the playing field across the Single Market and to avoid giving the wrong incentives in terms of energy consumption and pollution.

Source consilium.europa.eu