Luxembourg, 13/04/2005 (Agence Europe) - The Ecofin Council has called on the Commission to produce a legislative proposal for adjusting minimum rates of customs and excise duties on alcoholic drinks to take account of inflation. Member States that want to implement it can benefit from transition periods and derogations. The presidency has proved that it is very flexible and understanding of the new Member States, indicated minister Jeannot Krecké following the common declaration by Cyprus, Latvia and Lithuania favouring transition periods and derogations. He added that a “minimum” rise would effectively take place.
According to the Council conclusion, most Member States think that rate convergence will help reduce competition distortion and fraud, even if reservations remain about the level of convergence. Twelve Member States strongly oppose any proposal to set a positive minimum rate on wine. Domenico Sinscalco, Italian minister for the economy and finance, was pleased to indicate that “ a zero rate for excise on wine is allowed”.
During the Ecofin Council in December, ministers saw a report from the Commission on implementing directive 92/84/CCC on harmonising excise rates on alcohol and alcoholic drinks (EUROPE 8843). This report indicates that application of the excise rates is very divergent, damages the internal market and that there were important differences between Member States causing competition distortion and tax evasion. The report concludes the need to revise for the first time excise rates, notably by re-evaluating them by 24% to take into count of inflation between January 1993 and December 2002.