Brussels, 28/11/2006 (Agence Europe) - At the Ecofin Council on Tuesday 28 November, the Czech Republic vetoed the Finnish Presidency's proposed compromise on adjustment in line with inflation of excise duties on alcohol, intermediate products (e.g. fortified wines, sherry) and alcoholic drinks. With the backing of Latvia, it refused to accept any revaluation of its minimum excise duties on beer, invoking the right of equality of treatment in relation to the zero excise duty that wine enjoys. The Council asked the Commission carry out a study on how excise duties on alcoholic drinks, including wine, are applied in the EU. The results of this study are expected during the first half of 2007, under the German Presidency.
“We were unable to reach a solution acceptable to all Member States”, even thought the majority supported our compromise proposal, said Mr Eero Heinäluoma, Finnish finance minister. This suggested compromise proposed, in particular, an increase of 4.5% in excise duty on beer and intermediate products and of 31% for all other products. It also introduced the automatic review of excise duties at a later date.
The Finnish Presidency, particularly for reasons of public health, was keen to increase the levels on spirits more than on other alcoholic drinks. The majority of Member States seemed to be in favour of a uniform revaluing in excise duties, the Commission having proposed 4.5%, which corresponds to inflation since the last EU enlargement.
On Tuesday morning, Germany, Spain, Cyprus, Greece, Italy and Portugal spoke of their difficulty in accepting automatic triennial review of excise duties. But this was not the main stumbling block, in the opinion of experts close to the matter. In a press conference, Laszló Kovács, European Commissioner with responsibility for taxation, gave some indication of how the mechanism could work. Following inflation, the Commission would automatically make a proposal to adjust excise levels every time the level of inflation reached a fixed limit, a 5% ceiling was mentioned. Finance ministers would thus retain their responsibility for accepting or refusing the proposal which automatically fell on their desk. (mb)