The current system still contains regressive elements which should be modified.

The Berlin Council took the opportunity to move further in the direction of removing some of the regressive elements of the own resources system related to the VAT resource by reducing the rate at which it is called.

In order to continue the process of making allowance for each Member State's ability to contribute and of correcting the regressive aspects of the current system for the least prosperous Member States, the maximum rate of call of the VAT resource will be reduced to 0.75% in 2002 and to 0.50% in 2004.

Therefore, VAT contributions are generally considered to be regressive, i.e. not respecting the Member States' ability to pay. The reforms of 1988 and 1994 (introducing a cap on the base and reducing the maximum rate of call progressively from 1.4% to 1%) have successfully reduced (but not fully eliminated) this regressive element. As a result of these reforms, the share of the VAT resource has gone down from 60.0% in 1988 to 35.4% in 1999. The VAT resource is not perceived by citizens as a tax on consumer consumption, but rather as a Member State contribution to the EU budget (Still, the basis for determining the contribution is the VAT ...[+++] revenue and the adaptations do not influence this by more than 5%.)

DECLARE their intention of taking greater account of the contributive capacity of individual Member States in the system of own resources, and of examining means of correcting, for the less prosperous Member States, regressive elements existing in the present own resources system;

The Protocol on Economic and Social Cohesion agreed at Maastricht is designed to confirm the line already taken in 1988: the European Council declares its "intention of taking greater account of the contributive capacity of individual Member States in the system of own resources, and of examining means of correcting, for the less prosperous Member States, the regressive elements existing in the present own resources system".