Europe’s economic challenges are well documented. Productivity growth has slowed, energy costs have risen and global competition has intensified. At the same time, the EU needs unprecedented levels of investment to support innovation, strengthen its security and resilience, develop new technologies and deliver the green and digital transitions.

EU tax policy cannot solve all these challenges. However, it can ensure that governments can raise the revenues needed to fund public spending, while companies have the lowest barriers and highest incentives needed to contribute.

Right now, one of the biggest issues with EU tax policy is that EU tax rules are either highly duplicative or implemented inconsistently. Every euro and every hour spent navigating these inefficiencies distracts limited resources from high-value work for both companies and tax authorities.

Companies cannot invest these resources in R&D or other growth opportunities. While administrative burdens related to tax policy may not stop a company from making an investment, it may factor into broader hesitations or impact decisions about financing, production, business structures and the location of investment.

Tax authorities, similarly, cannot spend their time on high-value activities like tackling tax avoidance. This limits the effectiveness of key rules like the Anti-Tax Avoidance Directive and the administrative cooperation rules on anti-tax avoidance information (DAC 6), as tax authorities spend more time weeding through non-comparable or duplicative information.

In some cases, divergent implementation can even undermine the Single Market. This was the case in the Interest & Royalties Directive and Parent Subsidiary Directive, where the co-legislators agreed to support the Single Market by getting rid of intra-EU withholding tax on routine inter-group transactions. Even so, the implementation of these two directives was so challenging that companies often declined to pursue these exemptions.

Pro-growth tax policy, in the EU context, does not mean weakening tax rules. Instead, it means optimising the effectiveness of the legislation we have at hand.

This cost includes more than the amount paid in tax. It also includes economic distortions, administrative expenditure, compliance costs, legal uncertainty and the cross-border friction created when supposedly common European rules produce multiple national systems in practice.

The Taxation Omnibus and DAC recast are promising examples of how tax policy can support competitiveness without weakening legitimate enforcement objectives. They show that it is possible to preserve strong protections while reconsidering requirements that are duplicative, outdated or unnecessarily costly.

The Commission should now carry that approach into the rest of the EU’s fiscal agenda.

Europe should not wait for tax rules to become unmanageable before simplifying them. New proposals should be designed for administrability from the outset. Their likely effects on investment, innovation and the Single Market should be examined alongside their expected revenue. Implementation should be supported by timely guidance, workable systems and realistic transition periods. Outcomes should then be reviewed against clear economic and operational criteria, with revision, postponement or withdrawal remaining genuine options when a measure underperforms.

None of this will end up on the front page of your favourite newspaper – and that is probably for the best.

But a stronger economy, productive investment, quality employment and Europe’s capacity to deliver on its strategic priorities certainly will. By embedding pro-growth principles throughout the tax policy lifecycle, the EU can ensure that its fiscal framework helps support those outcomes rather than quietly standing in their way.