A4-0253/96

Resolution on the Commission Report to the Council and European Parliament on the rates of duty laid down in Council Directive 92/79/EEC of 19 October 1992 on the approximation of taxes on cigarettes, Council Directive 92/80/EEC of 19 October 1992 on the approximation of taxes on manufactured tobacco other than cigarettes, Council Directive 92/84/EEC of 19 October 1992 on the approximation of the rates of excise duty on alcohol and alcoholic beverages and Council Directive 92/82/EEC of 19 October 1992 on the approximation of the rates of excise duties on mineral oils (COM(95)0285 - C4-0430/95)

The European Parliament,

- having regard to the Commission Report to the Council and European Parliament (COM(95)0285 - C4-0430/95),

- having regard to its resolutions of 13 June 1991 on excise duty on mineral oils ((OJ C 183, 15.6.1991, pp. 286, 290 and 293.)) and 10 March 1992 on excise duty on cigarettes, manufactured tobacco and alcoholic beverages ((OJ C 94, 13.4.1992, pp. 33, 35, 38 and 41.)),

- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy and the opinions of the Committee on Agriculture and Rural Development, the Committee on Transport and Tourism and the Committee on Environment, Public Health and Consumer Protection (A4- 0253/96),

General principles

1. Calls on the Commission to draw up an annual report on trends in the evasion of excise duties and to request Member States to prepare annual reports on the problems experienced in differential rates of excise duty and the steps taken to rectify the problems in line with the principles of the single market;

2. Emphasizes that health considerations should be taken into account as part of the excise duty review;

Taxes on cigarettes and manufactured tobacco

3. Calls on the Commission to study the present system and, if it finds no serious distortions, to keep the present system; otherwise it should come forward with new proposals;

4. Calls on the Commission to study the problem of the 'automatic trigger' and come forward with proposals if distortions are identified;

5. Urges the Commission to make provision in its forthcoming proposals for definite upward harmonization of tobacco prices, based on higher duty rates across the EU for reasons of health and wider objectives of the Treaty on European Union;

6. Is of the opinion that the four types of market failure in relation to smoking - social costs, health risks, nicotine addiction, and monopolistic practices - should be addressed, and asks the Commission to examine if such market failures could be corrected by excise duties;

7. Is of the opinion that the Commission should consider the impact on cigarette retail prices of price discrimination among markets possibly practised by cigarette manufacturers;

8. Calls on the Commission to put forward appropriate proposals as soon as possible to end the smuggling of products intra and extra EU on which no duty has been paid and which are fraudulently sold in the EU at a substantial profit, owing to the high level of excise duty;

9. Believes that, in the interests of better operation of the internal market and a consistent health policy, the relationship between excise duty on cigarettes and hand-rolled tobacco must be reviewed and asks the Commission to present a proposal as soon as possible if anomalies are identified;

10. Calls on the Commission to ensure that its next review carried out under Directive 92/79 and 92/80 is carried out in a timely fashion and requests the Commission to put forward legislative proposals to resolve the problems identified in its 1995 Review;

11. Requests the Commission - in case of negative employment effects stemming from higher taxation - to come forward with a conversion programme for the Community tobacco industry and the tobacco-growing areas, which are situated in the less-favoured regions of the EU;

Excise duty on alcohol and alcoholic beverage

12. Calls on the Commission in its forthcoming proposal to examine - and then propose the appropriate amendments to the existing Directives - the following guidelines:

(a) the difference between the rates of excise duty on wine, beer and spirits should not be increased,

(b) retaining, expanding or creating the possibility of small distillers' and brewers' products being subject to excise duty at a lower rate,

(c) a report on the production of wine including all relevant aspects such as taxation, should be submitted to the Council and the European Parliament within a year following adoption of this resolution,

(d) all new forms and mixtures of alcohol i.e. alcoholic lemonade, ready made cocktails, etc., should be subject to excise duty,

(e) cognizance should be taken of the Court of Justice decision on the question of cross-border shopping on payment for excise duty either at point of purchase or at point of destination,

(f) Member States in conjunction with the Commission should assess the external costs (social, economic and health) of alcohol consumption in each Member State; this assessment should include both the positive and negative aspects of alcohol consumption;

13. Calls on the Commission to work towards the achievement of an equitable tax system where there is no distortion of competition between alcoholic beverages;

14. Recalls the terms of Article 99 of the Treaty, and notably that approximation of national taxation systems is not an end in itself; it would only be necessary if the attainment of the single market were to be compromised;

15. Recalls that any study on competition between beverages cannot be limited to alcohol alone but must involve an analysis of the cross-elasticity of demand;

16. Calls on the Commission not to amend the Directive on structures;

17. Calls on the Commission to subject alcohol other than ethyl alcohol, which is not authorized in the manufacture of alcoholic beverages since the condition of agricultural origin is not met, to the same controls and monitoring as ethyl alcohol with the aim of properly protecting the health of consumers;

Excise duties on mineral oils

18. Calls on the Commission in its forthcoming proposal to examine - and then propose the appropriate amendments to the existing Directives - the following guidelines:

(a) that as a tried and tested tax instrument excise duties on motor fuels should be used actively to promote a wide range of transport, energy, environmental and economic policy objectives; this is especially so in the light of difficulties in introducing new fiscal instruments such as the proposed CO2 tax;

(b) that a substantial increase in minimum rates on motor fuels should be contemplated, to be introduced over a number of years, with a view to reaching ambitious minimum rates;

(c) that tax differentials on motor fuels, such as unleaded, super unleaded and leaded petrol and various diesel fuels, should be graduated upwards from the minimum with reference to internalising their external costs and to the polluter pays principle; mineral oil products that are more polluting should never be treated more favourably in tax matters than less polluting competing products;

(d) that heating gas oil and motor fuel excise rate differentials operating in favour of certain Member States should be phased out on the grounds of their potential distortion of the internal market;

(e) that a comprehensive tax base for mineral oils and competing products be defined; if, as at present, natural gas (coal) and kerosene for aviation are excluded from the tax base, the justification for such exclusion should be clearly established and its implications for the operation of the internal market and the attainment of wider Treaty objectives be explored;

(f) the extent to which the active employment of excise duties on mineral oil would generate indirect tax revenue as an offset for direct taxes on labour and how through the annual Broad Guidelines of Economic policy such tax switching from direct to indirect sources might be facilitated;

19. Instructs its President to forward this resolution to the Council, the Commission and the parliaments of the Member States.