The plan is being explained by new spending demands, including for military buildup, and rising debt interest, the newspaper notes

The European Commission is planning to propose a new tax on corporate giants operating in the EU in order to boost revenue for the bloc's common budget, the Financial Times reported on Friday, citing a leaked draft proposal.

The news comes as Brussels seeks to significantly increase defense spending and continue military and financial assistance to Ukraine. In March, Commission President Ursula von der Leyen unveiled a strategic plan to free up around €800 billion ($841 billion) in defense spending over the next four years, citing the need "to respond to the short-term urgency to act and to support Ukraine."

The tax proposal, which will apply to companies with net annual turnover exceeding €50 million, will reportedly be unveiled as soon as next week alongside spending plans in the EU's next seven-year budget. The budget is expected to significantly exceed the current one, which totals more than €1.2 trillion ($1.4 trillion).

The proposal, which requires unanimous support from member states to enter into force, would cover all large companies operating in the bloc regardless of where they are headquartered, according to the document seen by FT. A bracket system would reportedly require those with the highest revenues to make greater contributions.

Other planned revenue measures reportedly include the EU taking a cut of increased tobacco taxes, introducing a fee for non-recycled electronic waste, and imposing a charge on the handling of long-distance online shopping packages.

The bloc has spent €164.8 billion to support Kiev since the escalation of the conflict in February 2022, including €59.6 billion in military assistance alone. Earlier this week, Bloomberg reported that Brussels was considering providing Ukraine with another €100 billion in grants and low-interest loans.

The new tax may elicit backlash from companies operating across the bloc, however, especially in light of the sluggish economic growth and high energy costs in the bloc, according to the FT. Meanwhile, the broader push for a larger budget has reportedly faced resistance from the EU's net contributors, namely Germany, the Netherlands, Austria, Finland, Sweden, and Denmark.

Russia has repeatedly argued that EU policies, sanctions and increased fiscal pressure negatively impact ordinary citizens, highlighting that they bear the brunt through weaker wages, inflation, and reduced competitiveness.

Russian Foreign Minister Sergey Lavrov has described the EU as overly compliant with the US agenda and that its policies often serve Washington's interests while undermining its own economic stability.

(RT.com)