Development and Finance from issue 2010/3

Péter Benő Banai

Fiscal Federalism and Reform of Community Budget Revenue Structure Plea in Favour of GNI-based Contribution

- Abstract -

JEL H-77, H-87


The individual own resources elements are judged by the weighting of criteria, which is a matter of choice. The approach which prefers stability and cost efficiency might consider the GNI-based contribution as the perfect Community revenue item. Admittedly, the GNI-based contribution does not ensure a direct relationship between taxpayers and the Community budget, but this is not necessarily a disadvantage. If we consider Member States (rather than citizens) as the basic units of the Community then the GNI-based contribution is in line with the subsidiarity principle: i.e. the contributions are paid by national governments and the contribution is collected by each Member State from the taxpayers according to its special features and its own tax system. A real alternative of the current system of revenues is the new real VAT-based contribution system, but this would be more expensive and would result in an unfair sharing of burdens by Member States. The assumption that the net position approach will disappear is only an illusion in this case too.

Péter Benő Banai, PhD student (BME, Doctoral School of Technical Management, Business and Organisational Science)

The purchase/download section of full articles is still under development. If you want to read full articles, please contact the editorial office of Fejlesztés és Finanszírozás/Development and Finance by sending an e-mail to Thank you for your understanding.