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Excise duty on alcohol: minimum levels should rise by 4.5%

Government

The Economic and Monetary Affairs Committee voted on Wednesday to support a rise in the EU-wide minimum levels of excise duty on alcoholic drinks in line with inflation since the EU enlargement of 2004 - that is by 4.5%.

This is in line with a compromise proposal which - according to Taxation Commissioner László Kovács who spoke to the committee later in the day - has a good chance of obtaining the unanimous support of Member States it needs to be adopted. This is the second time the committee has voted on this issue. In its vote in April, the Committee narrowly backed its rapporteur, Astrid Lulling (EPP-ED, LU), in proposing to scrap the minimum rates altogether. When the report came to the May plenary session, however, a series of very close votes left the situation unclear, and MEPs voted to reject the report and return the issue to the Economics Committee.

This time the vote was again very close, with a majority of two votes on many of the key amendments. In the end though, MEPs in the committee backed the proposal to increase the minimum levels of duty by 4.5%, reflecting price rises since the May 2004 enlargement. The original Commission proposal had been for a much larger increase, in line with inflation since 1992 when the minimum levels were first introduced, but the Commission is now backing the lower increase with the aim of obtaining unanimity in Council.

Speaking to the committee on Tuesday evening, Commissioner Kovács said, „The ECOFIN Council could easily reach unanimous agreement on this proposal. Not even the Czech Republic is now against.” (The Czech government had previously opposed the plan). He also indicated that another request of MEPs, to study whether setting maximum and minimum rates or encouraging tax competition would be the best way to achieve convergence in rates of duty, would be accommodated in a study the Commission was already planning. At the plenary session in July, Parliament will vote on the amendments now adopted by the committee. No further amendments will be admissible at that stage (EP Press).

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