Brussels, 07/12/2004 (Agence Europe) - Re-kindling the debate on excise rates applicable to alcohol - such is the wish expressed by the Commission which, represented by Laszlo Kovacs, presented its May 2004 report to Council Tuesday on excise rates applicable to alcohol and alcoholic beverages (EUROPE of 28 May). The Taxation Commissioner acknowledged that, in this field, "there is still a great deal to be done".
The report is the second since adoption of the Community legislation in this field (Directives 92/84/EEC and 92/83/EEC). It examines: the smooth working of the internal market, competition between the different categories of alcoholic drinks and the real value of excise duties. Since 1993, application of very different excise rates has been a burden on the good operation of the internal market. The taxation burden on alcoholic drinks is too high compared to their intrinsic value and there are considerable differences between one Member State and the next, which entails distortion and fraud such as counterfeiting. Furthermore, the EU legislation imposes minimum rates that have remained unchanged since they were adopted. According to the Commission, these minimum rates must be re-valued by about 24% in order to take inflation into account over a ten year period. Although it does not contain any legislative proposal, the report hopes to launch the debate on the need to review the current rules. Mr Kovacs recognises the "different interests of Member States because of the different production cultures". Controversial subjects include the possibility of applying a zero rate for still wine and sparkling wine, a measure that is needed for producer countries while the other Member States believe developments in the European legislation should be based on the establishment of a minimum positive rate for wine.