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EU consults on diesel tax harmonisation

27th July 2006, Page 6
27th July 2006
Page 6
Page 6, 27th July 2006 — EU consults on diesel tax harmonisation
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Which of the following most accurately describes the problem?

THE EUROPEAN Commission has asked haulage companies to take part in a public consultation on the future of European Union (EU) diesel legislation, as part of an attempt to bring increased harmonisation to Europe's varied duty rates.

Duty across the EU currently varies massively, with the UK having the highest in any member state at €782 per 1,000 litres. The lowest rate is about €302 per 1,000 litres.

The EU consultation paper claims that as well as unfairly penalising hauliers in high-tax states such as the UK, this also leads international hauliers to undertake "fiscal planning" of journeys. This is illustrated by the average diesel consumption per head of population in low-tax Luxembourg being more then 4,200 litres, compared with a maximum of 750 litres elsewhere in the EU.

The report adds: If hauliers make detours on their routes to take advantage of the significant differences in national excise duties on diesel fuel... it can have negative effects on the environment." Such practices also deny high-duty countries revenue.

Companies are being asked to choose from three options, to help guide the Commission in drafting formal proposals for reform: • The status quo—an increasing minimum rate • A narrow band of minimum and maximum rates, which would be reduced to E100 per 1,000 litres by 2010

• A set rate of €400 per 1,000 litres Comments are invited by 30 September—to find out more, visit: http://ec.europa.euftaxation_customs/common/consultations/ tax/article2717 en.htm

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