Monti to revise plan to extend excise duties

Date: 13/02/1997

TAXATION Commissioner Mario Monti will revise his plans for a framework directive extending the scope of excise duties on energy products in the next month, following lengthy discussions at this week's European Commission meeting.

Despite opposition from four of his colleagues, Monti has committed himself to pushing through a proposal in time for a meeting of EU finance ministers on 17 March.

Commission officials stressed there was general support for the principle of extending the excise duty regime to electricity, natural gas and coal and increasing taxes on motor and heating fuels.

But Trade Commissioner Sir Leon Brittan, Industry Commissioner Martin Bangemann, Economics Commissioner Yves-Thibault de Silguy and Energy Commissioner Christos Papoutsis declared their opposition to the idea.

It was clear ahead of yesterday's (12 February) Commission meeting that agreement on the framework would not be possible, not least because of the absence of Environment Commissioner Ritt Bjerregaard, co-sponsor of the initiative.

Although the new taxes proposed would be below the actual rates already levied by EU governments, industry lobbies have mounted a fierce campaign against the plans, claiming they are an attempt to introduce a carbon dioxide tax by the back door.

A Commission official stressed the main aim of the measure would be to “eliminate distortions of the single market”, improve environmental protection and allow taxes on labour to be reduced. She claimed member states would have a large degree of flexibility in applying the new rates.

The current draft of the proposals would see minimum taxes on petrol rise to 450 ecu per 1,000 litres in 1998, increasing to 500 ecu by 2002. The minimum rate for diesel would rise from 343 ecu to 450 ecu in 2002.

Natural gas used as a motor fuel would be taxed at three and a half ecu per gigajoule in 1998, rising to six ecu in 2002. Electricity would be taxed at one ecu per megawatt/hour in 1998, increasing to three ecu in 2002.