91997E3239

WRITTEN QUESTION E-3239/97 by Bill Miller (PSE) to the Commission (20 October 1997)

Subject: Single Market

As Commissioner Monti has indicated that Duty Free is to be abolished for inter EU travellers as of 1 July 1999 as part of the completion of the Single Market, when does he expect to see the elimination of tax discrimination in the area of Excise Duty which is also part of the completion of the Single Market?

Answer given by Mr Monti on behalf of the Commission (18 November 1997)

As regards duty free shopping, Council in fact took the decision to abolish it as long ago as 1991. At that time, however, it also granted a seven and a half year 'winding down' period, so as to permit a smooth transition for all concerned.

As regards tax discrimination, it first has to be recognized that the term is subject to widely differing interpretations. In Community law its meaning is set out in Article 95 of the EC Treaty which prohibits a Member State from so taxing the products of other Member States as to put its own domestic products at an advantage. The Commission invariably takes action against any such tax discrimination which comes to its notice.

Against that background, therefore, it is assumed that the Honourable Member is speaking of 'tax discrimination' in a broad sense to refer to the very wide differences in tax rates which continue to exist - quite legally - between Member States and different categories of product. This wide divergence is the result of the present system, based on minimum rates. The Commission is currently studying the issue of excisable goods in the field of alcolhol and tobacco products and will make a report, together with any appropriate proposals, to Council and the Parliament.