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The European Commission has put forward proposals for direct EU taxes on member states, including a possible EU-wide value-added tax (VAT).
The proposals are part of a package of options for finding new sources of revenue for the European Union budget.
EU Budget Commissioner Janusz Lewandowski first said in August that he wanted member states to consider allowing the EU to levy direct taxes.
The UK, Germany and France have all rejected the idea of direct EU taxes.
The coalition government faces the prospect of a referendum on Europe and the outbreak of political warfare between the Conservatives and Liberal Democrats after Nicolas Sarkozy and Angela Merkel demanded a new EU treaty within two years.
France and Germany called on European Union member states yesterday (18 October) to draw up proposals by next March for a permanent system to handle crises in the euro zone by suspending voting rights, admitting that it would mean changing the EU treaty.
The UK, Germany and France have all rejected the idea of direct EU taxes.