No C 225/48 Official Journal of the European Communities 10. 9. 90 
— the use of Article 118a be further clarified in line with 
the Madrid European Council conclusions, 
— an inter-governmental conference should tackle the 
revision of the Treaty and the need for balance and 
parity between the social aspects and the economic 
aspects. 
5.4. An authentic People's Europe, similarly, must be 
accorded more concrete form in parallel to the widening 
Community horizon taking shape. In view of the Com­
munity's vital role in this respect (point 3.2), and in 
addition to specific forms of cooperation outlined in point 
4.1, '1992' and the emerging 'Europe without frontiers' 
urgently require: 
— the early adoption of the draft Directive on local voting 
rights for Community nationals resident in another 
Member State (*), 
— a common legal framework agreed by the Member 
States as regards immigration and the free movement of 
third country residents throughout the Community, 
including itinerant peoples irrespective of their citizen­
ship, 
— a transnational display of the Community's firm 
attachment to basic civic and development rights, for 
(!) Doc. COM(88) 371 final, 25 January 1989. 
1. The Commission proposal 
1.1. In 1987 the Commission proposed single rates for 
the whole of the Community. 
To introduce an element of flexibility in the case of VAT, 
the Commission proposed that standard rates be allowed to example Community accession to the European Con­
vention for the Protection of Human Rights and 
Fundamental Freedoms — a fitting condition and 
protective rallying point for future membership, 
— the ratification by all Member States of the Conventions 
and the recommendations of the ILO. 
5.5. In all this, the role of the social partners, and of the 
multifold socio-economic groups represented in the 
Economic and Social Committee, must be highlighted. As 
the deepening and widening processes take place, and new 
social and civic fora emerge together with new free trade 
unions and new entrepreneurial activities, European union 
will require an appropriate consultative framework for the 
momentous transformation which we are privileged to 
witness. The time has thus come for the Community to 
define the institutional position and role of the Economic 
and Social Committee. 
Done at Brussels, 5 July 1990. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE 
vary within a band of six percentage points whilst reduced 
rates would have a spread of five percentage points. In the 
case of excise duties, however, the Commission opted for 
rigidity, claiming that: 
'any flexibility in the rate of duty which might be 
permitted would be compounded with the permitted Opinion on the Commission communication to the Council entitled 'New Commission approach 
to excise-duty rates' 
(90/C 225/17) 
On 22 January 1990 the Council decided to consult the Economic and Social Committee, under 
Article 198 of the Treaty establishing the European Economic Community, on the Commission 
communication to the Council entitled 'New Commission approach to excise-duty rates'. 
The Section for Economic, Financial and Monetary Questions, which was responsible for 
preparing the Committee's work on the matter, adopted is opinion on 21 June 1990. The 
rapporteur was Mr Delia Croce. 
At its 278th plenary session (meeting of 5 July) the Economic and Social Committee adopted the 
following opinion by a large majority, with seven votes against and four abstentions. 
10. 9. 90 Official Journal of the European Communities ^oC^B^ 
margin forVAI^ratesand would therefore resultinta^ 
induced price differentials well in excess of^^M^. 
L^, Agreeing with the comments made bv the member 
states and European parliaments the commission now 
rejects the case for rigiditv and proposes some degree of 
fle^ibilitv, 
1,^, I^his degree of fle^ibilitv would consist of setting 
minimum rates for all dutiableproducts with thee^ception 
of certain petroleum products ^diesel^ heating gas-oil^ 
heavv fuel oil^ where rate bands would have to be fi^ed 
because of the higher risks of distorted competition, 
1,^, I^he Commission also proposes benchmark i,e, 
target rates^which^ in the case of tobacco and alcoholic 
beverages^ are higher than the single rates envisaged in the 
Commission^sprevious proposal, 
I^he target rates are to be the long-term objective of all the 
member states, 
L^, I^he Commission has also committed itself to 
presenting proposals on the movement of products subject 
to excise duties^ as well as on the operation of intercon 
nected warehouses for the movement of goods under dutvD 
suspension arrangements. 
^, comments 
^,1, I^be problem of excise duties has to be seen in the 
larger content of indirect taxation and for that matter the 
taxation system asawhole, 
Beingconsumer ta^es^ e^ciseduties have vervdifferent 
histories in the member states of theC^ommunitv. C^n 
occasions thev have been used to solve practical and urgent 
budgetary problems and at other times thev have been used 
tocurbtheconsumptionofindividualproductseitherinthe 
general interest or to protect public health, 
(Generallvspeaking^ andparticularlvin thepast^e^cise 
duties have met with popular hostility because thev have 
tended to reduce purchasing power and in some cases even 
be charged on basic necessities. 
Efforts have been made in the Community to reduce the 
number of products subject to excise duties sothat the 
principal dutiable products left toda^ are alcoholic 
beverages^tobaccoandmineraloils,^evertheless^those 
ta^ rates and structures still in existence varvgreatlv from 
member ^tate to member ^tate^trving to harmonise them 
is therefore no easv matter, 
L^he single European market will clearlv have to be 
underpinned bvauniform taxation system if goods are to 
circulate freelv without distorting competition, staving 
said thismhe excise dutv problem will not be eas^ to solve unless it is tackled within the content of general taxation 
policvr^and not onlv indirect ta^ation^, 
^. It is important first of all to sav how difficult it is to 
deliveran opinion onageneral communication which deals 
solelv with excise duties but does not make clear the 
position and intentions of the Commission regarding the 
actual implementationof thenew svstem, ^eare told 
nothing about how the duties will be collected^ what 
arrangements willgovernthemovementand storage of 
goods^ and what controls will or ma^ have to be imposed. 
The committee regrets these lacunae which circumscribe 
the scope of this opinion, 
^, The campaign to harmonize excise duties is limited 
in the proposal to^fi^ing minimum rates and^setting 
target values for longer-term convergence, 
l^his isdone to introduce an ^element of fle^ibilitv^ a 
concept which on careful analysis is misplaced, 
member states in fact will be required^ from l]anuarv 
l^^toraisetheircurrentratesif thev fall below the 
proposed minimum rates^whereas thev will be under no 
obligation to make adjustments should their rates be 
higher, 
Theproposedpackagethus falls short ofwhatisrequiredif 
the single European market is to becomearealitv and ta^ 
frontiers are to be dismantled. 
In 1^^ the Commission in fact said that the single market 
could onl^ be achieved if common rates of excise dutv were 
charged on harmonised structures^. 
It is also necessarvtomakeclearthat excise dutiescanonlv 
be fullv justified if thev are based on objective ta^ criteria 
for each category of products at the present time the 
differences in such ta^ criteria are substantial, 
^m, L^he combination of widelv differing excise duties 
and VA^fratescanhavea ver^considerableimpacton 
consumerpricesandconsequentlv on termsof competition. 
^, Implementation of thepresent CommissionproD 
posal will thus have little effect on real harmonization. Are 
we therefore not entitled to ask whether there is anv real 
pointintinkeringwithpresentarrangementsand encroach^ 
ing on the autonomy of individual member states when the 
results will in anv case be ofdubious or limited valued 
^, ^hat the dismantling of ta^ frontiers and the free 
movement of private individuals ^an inviolable objectives 
will indoubtedlv do is make it eas^ and convenient to 
purchase goods wherever ta^esandthereforepricesare 
lowers therebvgeneratingaconsiderable trade flow. 
(!) Doc. COM(87) 320 final, p. 15. (2) Doc. COM(87) 320 final. 
No C 225/50 Official Journal of the European Communities 10. 9. 90 
Restrictions on the movement of goods might consequently 
be introduced even if such action is incompatible with the 
single European market. 
In the absence of any very close approximation of excise 
duties, it might be necessary to draw up rules and 
agreements on the purchase and transport of dutiable 
goods even though such rules and agreements should not 
prejudice free competition and not affect the rights of 
individual European citizens. Any controls should there­
fore be aimed solely at preventing tax fraud and 
unauthorized business and should be carried out in exactly 
the same way as they are at national level. 
Under no circumstances will it be possible to have the kind 
of controls we currently have at our frontiers. 
2.7. Excise duties should be harmonized at the lowest 
possible levels, provided the latter are compatible with 
economic requirements and with policies designed to 
restrict the consumption of individual products, sometimes 
for health reasons. 
Harmonization should also take into account the need to 
avoid undue distortions of competition between products 
subject and those not subject to excise duties. 
Excise duties tend in any case to be an obsolete form of 
taxation so we cannot preclude the possibility of their being 
abolished in the more or less long-term future. 
Economic requirements are by their very nature likely to 
ensure compliance with the principle whereby excise duties 
should be a tax on consumption and not on the factors of 
production — a principle which the Commission has itself 
defended [doc. (73) 1234 final — 1 August 1973]. 
2.8. On the other hand we also need to remember that 
excise duties are a very important source of revenue in some 
Member States. A very significant drop in excise duties 
would therefore entail significant changes in these 
countries' taxation systems. Time will accordingly be 
needed to implement the changes. 
Since this is the reality we are confronted with, it will be 
necessary to act in a highly pragmatic manner, lay down 
appropriate time-scales and make appropriate adjustments 
to present arrangements. This means laying precise 
obligations on all Member States and pre-determining the 
stages of convergence, even if these carry us beyond the 
introduction of the single market. 2.9. The whole operation must be conducted in such a 
way that the abolition of frontiers does not give rise to 
fraud, tax evasion or serious distortions of trade. Nor must 
an unnecessarily heavy burden be placed on commercial 
activities. 
3. Conclusions 
3.1. The Economic and Social Committee reaffirms the 
validity of the opinions on excise duties delivered in 1988 
whilst accepting that adjustments will have to be made 
because of the present situation. 
3.2. The Commission's present communication requires 
substantial modifications before it can be approved. 
3.3. To be able to make an accurate and thorough 
assessment of the excise duty proposals, we would also 
need to be familiar with the proposals on the collection of 
duties, the movement of goods, controls, bonded ware­
house regulations, the marking of individual products and 
all other relevant aspects. 
3.4. Minimum and maximum rates need to be fixed for 
all categories of goods subject to excise duties. By doing so, 
rates will be confined within mandatory bands. 
3.5. Since significant changes in existing rates might 
cause problems for some Member States, convergence 
towards the new bands should be allowed to continue after 
the introduction of the single European market. 
3.6. In general, the minimum and target rates proposed 
by the Commission are too high. The bands mentioned in 
the present opinion should be consolidated at a lower level, 
especially in the case of certain products. 
3.7. The opinions which the Committee will be 
delivering on individual proposals will provide more 
detailed and specific information. 
Done at Brussels, 5 July 1990. 
The Chairman of the Economic and 
Social Committee 
Alberto MASPRONE