Parliament approved a non-legislative resolution which calls for a stronger role for the Commission to push through more harmonisation on the tax system in order to increase efficiency and a reduce red tape for businesses.

The European Parliament approved a resolution on the future EU value added tax system. On this resolution, the key proposals are to prioritize a crackdown on fraud, granting NGOs and small firms, exemptions and reducing rates for "green" products. The report, a response to the Commission's December 2010 Green Paper on the future of VAT, will feed into the upcoming Strategy on the Future of VAT, which is expected by the end of this year.

The main goal of the resolution is to strike a balance between maintaining VAT revenues at the levels needed to provide a major source of income while at the same time ensuring that they do not choke off useful activity. According to the resolution approved, this could be achieved chiefly by tackling fraud (which currently costs the EU €100 billion in lost revenue) and reducing the plethora of different exemptions and rates while, on the other hand, devising smart EU-wide systems that would make life easier for honest businesspeople and legitimate non-profit organisations in delivering their goods and services.

MEPs also called for a "Green VAT strategy" which would provide for reduced rates on eco-friendly products thereby making them more competitive with unecological alternatives produced more cheaply. Moreover, the resolution calls on the Commission to propose a mechanism allowing Member States wishing to strengthen civil society to grant a general VAT exemption for all or most of the activities and transactions carried out by these organisations, particularly smaller NGOs. It also asks the Commission and Member States to consider introducing a Europe-wide VAT exemption threshold for SMEs, with a view to cutting red tape and costs and facilitating access to the internal market.