A tax by any name is tax, but a top EU official think otherwise, calling the penalty attracted by exporters of products not conforming with CABM as a step for sustainability rather than a tariff or tax
A top EU official has finessed the Carbon Border Adjustment Mechanism (CBAM) as a measure designed to deal with carbon emissions rather than a tax or tariff. Regardless of the farrago, however, the fact remains that products and services that do not conform with the CABM-prescribed sustainability standards will carry an extra cost. The commonly accepted definition of that cost is tax!
However, for Gerassimos Thomas, Director General of the European Commission's Directorate General of Taxation and Customs (DG TAXUD), the form is obviously more important than the function. His submission that CABM is a step in the direction of promoting sustainability rather than a tax was aired by WION. It is somehow supposed to reassure exporters in India!
While CABM is unequivocally a move to persuade producers to adopt eco-friendly practices (nobody doubted this), it is a non-sequitur to say that it does not amount to a tax. This is not a misconception, as suggested by Gerassimos Thomas, but simply a reality. For, how does EU propose to implement CABM? By extracting a cost from the exporters. Tax, Gerassimos Thomas, is tax regardless of the name.