Thursday, May 31, 2012

Petition to European Parliament - Tax on Imported Services

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Dear members of European Parliament

The right to work at EU level is guaranteed by the Charter of Fundamental Rights of the European Union (Article 15).

Unfortunately, nowadays we face remarkable unemployment figures in EU, with the profound social and economic impact that it entails.

One of the reasons behind the unemployment is deindustrialization [1].

Cheap labor on countries with lower living standards jeopardize the sustainability of the welfare state.
Neo-protectionists theories provide sound arguments on the necessity to control free trade with countries having a different level of development and different social and environmental protection policies [2].

Social dumping is unfair competition and taxes on the importation of goods are therefore required to protect our local economy. While, with regard to goods, transport costs favor local economies, services such IT or telemarketing can be easily imported, affecting negatively the local job market.

The progress on telecommunications and internet have broadened the range of globalization to the services sector.

While the services sector is increasingly important in developed economies, it is one of the most fragile as information and knowledge can be delivered instantly, thanks to the information technologies.

To name but an example, the IT sector and India. In the recent years, most international consulting companies, driven by a higly dynamic and competitive environment, are pushed to offshore much of the IT work, to achieve competitive prices [4][5].

Surprisingly, India, a huge exporter of software services, has been taxing imported services since 1994 [3], and Brazil, also has a tax on imported services [6].

The lessons learnt against protectionism, from the 1930's, are no longer valid in the present world.

We believe that the control of the importation of services is as necessary as the immigration control, to protect our economies and our jobs.

Yours faithfully.

[1] Deindustrialization.
[2] Neoprotectionism.
[4] Offshoring.
[5] Accenture. The Offshore Ceiling–Fact or Fiction?.

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