WRITTEN QUESTION E-3423/00

by Ioannis Marínos (PPE-DE) to the Commission

(7 November 2000)

Subject: Fuel tax charges in Greece

In July 2000 the European Union published a very interesting outline of tax charges on various products in the Member States, entitled Excise Duty Tables (issued by the Taxation and Customs Union Directorate-General). This document includes a reference to fuel prices in Greece, showing that in the category of gas oil used for industrial or commercial purposes Greece levies duty of 252,55/1 000 litres, while the minimum duty under Council Directive 92/82(1), adopted on 19 October 1992 is 18/1 000 litres. The same applies to the category gas oil used for heating purposes, where in Greece it appears that a tax of 252,55/1 000 litres is levied. Finally, the situation in the category of liquid petroleum gas and methane is similar: the directive referred to above suggests no minimum tax, while Greece levies 13,69/1 000 kilos.

Could the Commission state whether these data, as presented in the document referred to above, are really correct, and give its view on the level of fuel taxation in Greece, particularly in view of the fact that the Greek Government consistently maintains that fuel tax charges in Greece are among the lowest in Europe, and that there is no way to reduce them? According to Eurostat's data, this statement is not true. Given that tax on industrial fuel oil is the fourth highest in the world, the question arises as to how any improvement in the international competitiveness of Greek industry, which is in any case the worst in the EU, may be achieved.

In addition I would like the Commission to give a general assessment of fuel taxation in the European Union and its effect on the growth rate and international competitiveness of European economies, at a time when the USA is enjoying a faster growth rate, perhaps partly because taxes on liquid fuel in that country are clearly lower than in Europe.

(1) OJ L 316, 31.10.1992, p. 19.

Answer given by Mr Bolkestein on behalf of the Commission

(22 December 2000)

The Commission publishes excise duty tables, in order to provide up-to-date information concerning the rates applied by the Member States on mineral oils, alcoholic beverages and manufactured tobacco products.

As is correctly mentioned in this publication, Greece applies the same rate of excise duty on both gas oil used as a propellant and gas oil used for industrial and commercial uses, mentioned in Article 8(3) of Council Directive 92/81/EEC of 19 October 1992 on the harmonization of the structures of excise duties on mineral oils(1), which is of 252,55/1 000 litres. This rate is in line with Council Directive 92/82/EEC of 19 October on the approximation of the rates of excise duties on mineral oils(4), which introduced a harmonised specific excise duty (applied to quantities rather than values) the level of which represents the minimum rate to be applied by each Member State. Community legislation allows Member States to apply in practice rates that may either exceed by far these Community minimum rates or be equal or very close to them, in order to take into account specific national policy considerations.

For gas oil used as motor fuel and gas oil used for heating purposes Greece applies rates of 252,55 and 18,71(2) /1 000 litres respectively, which are very close to the respective Community minimum rates of 245 and 18/1 000 litres. These rates are indeed among the three lowest rates currently applied by the Member States. However, for liquid petroleum gas (LPG) and methane, used for heating purposes, Greece applies a rate of 13,69/1 000 kgs while the Community minimum rate is fixed at 0/1 000 kgs.

For gas oil used for the industrial and commercial uses mentioned in Article 8 (3) of Council Directive 92/81/EEC, Greece applies a rate of 252,55/1 000 litres while the Community minimum rate is 18/1 000 litres. Greece also applies a rate of 139,56/1 000 kgs on heavy fuel oil for which a Community minimum rate of 113/1 000 kgs is fixed.

Community legislation and in particular Article 8 (3) of Council Directive 92/81/EEC gives the possibility to each Member State to apply reduced rates of taxation on gas oil, LPG, methane and kerosene, used under fiscal control for certain industrial and commercial uses, provided that the rate charged is not less than the minimum rate set in Directive 92/82/EEC. No prior Community authorisation is necessary.

With reference to the impact of mineral oil taxation on the competitiveness of Greek industry, analysis carried out for the Commission indicates that the implementation of the excise duty changes, included in the Commission proposal for a Council directive restructuring the taxation of energy products(3), when combined with recycling of the additional revenues through reductions in social security contributions, would have small positive impacts on gross domestic product, employment, and the balance of trade. Moreover, with respect to the potential gap in competitiveness between European economies there is firstly no evidence that the countries with the highest excise duties on mineral oil are the least competitive in Europe. In addition, it should be recalled that taking a very selective view by focussing on the level of mineral oil taxation does not do justice to the complex nature of competitiveness. Indeed the impact on competitiveness of replacing excise duties by other taxes is in general uncertain and would depend on the details of any such switch.

One should not forget that the current level of Community excise duty rates on mineral oils has remained unchanged since 1 January 1993. Finally, concerning the request for a general Commission assessment of the effect fuel taxation has on the growth rate and the international competitiveness of European economies as compared to the United States, the Commission notes that the Community is considerably more efficient in its energy use than the United States, at least in part due to the positive incentives for fuel saving offered by the higher level of fuel taxation in the Community.

(1) OJ L 316, 31.10.1992.

(2) This rate is valid for the period from 16.10.2000 to 27.4.2001; outside this period the normal rate of 252,55/1 000 litres is applied.

(3) COM(97) 30 final.

(4) OJ L 316, 31.10.1992.