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EU Considers Alcohol Tax Reforms To Combat Smuggling

by Ulrika Lomas, Tax-News.com, Brussels

25 September 2001

The European Commission is planning to tackle the disparity between alcohol taxation between the 15 member states of the European Union in a bid to cut down levels of smuggling. The Commission also believes that the present system of taxing alcohol stands in the way of a European single market because there are so many differences in the rates.

Essentially, governments can impose whatever tax they wish on alcohol although there is a minimum charge. The EU's single market commissioner, Fritz Bolkestein, is believed to be discussing other proposals such as a rise in minimum rates in line with inflation, higher taxes based on the current average tax rate across the EU, or abolishing the minimum level of tax rates.

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