Taxation is central to national sovereignty. Tax revenues provide governments with the money they need to exist and function effectively. In addition, tax laws reflect the fundamental choices of different EU countries in important areas of public expenditure, such as education, health and pensions. They influence private consumption and savings and set a financial framework for business activity and environmental issues. This is why the power to raise taxes and set tax rates lies with national governments. So what role can the EU play in making taxation fairer, easier, and more efficient for... governments, companies and citizens? This publication is a part of a series that explains what the EU does in different policy areas, why the EU is involved and what the results are.