Brussels, 21/11/2006 (Agence Europe) - Last Friday the Finnish presidency produced a new compromise proposal on the directive adjusting excise rights on alcohol and alcoholic drinks linked to inflation. The new aspects of this proposal are the setting of beer excise rate re-evaluation at 4.5% as from January 2008 and the reintroduction of an automatic revision mechanism that will adjust excise rates on a quarterly basis as from 2011. The Finnish presidency is sticking to the Commission's proposals for taking inflation into account, assessed at 31%, in order to reassess excise rates for other products affected (EUROPE 9261). This draft compromise is on Coreper's agenda, which will be bringing Member State ambassadors together on Wednesday.
László Kovács, Commissioner for taxation and customs union has written to European finance ministers suggesting ways they can find a compromise on this dossier. Taking into account the difficulties experienced by Member States and expressed at the last Ecofin Council (EUROPE 9301), he is proposing to only begin taking inflation into account from 2004. The Commissioner is imposing two conditions on the setting of this date: transition periods should no longer exist, re-evaluation will be applied from 2008, and an automatic three yearly revision mechanism will be introduced. This kind of mechanism will now get rid of the obligation for ministers to periodically examine questions of a technical nature.
Kovács' suggestions will help muster the support of the new Member States which consider the 31% excise re-evaluation rate as too high since they only joined the EU in 2004. Taking 2004 as the date for beer in the calculation of inflation would correspond to a 4.5% increase in excise taxes, a figure the Finnish presidency uses in its most recent compromise proposal. This increase will have no impact at all on excise rates currently applicable in Germany and the Czech Republic for beer. During the last Ecofin Council, these two Member States called for exemptions on this drink from excise tax re-evaluation.
The Ecofin Council of 28 November will be tackling this dossier. It will also tackle the draft directive on tax thresholds and excise duties on goods imported by travellers from third countries (EUROPE 9140). In his letter Commissioner Kovács appealed for the introduction of two thresholds distinguishing entry onto EU territory by the mode of transport used. The Finnish presidency had proposed going back to a single threshold (EUROPE 9301. (mb)