THE EU/IRELAND: The rates of taxation on beer, wines and spirits in Ireland rank among the highest in the whole of the European Union, according to a study published by the European Commission yesterday.
Ireland has the highest rates of excise duty on wine and sparkling wine, the second highest duty on beer after Finland and the third highest duty on spirits after Finland and Sweden.
The Commission concludes that the vast differences in levels of tax on alcohol across the 25-state Union are so great that they distort the supposed single market and encourage fraud and smuggling.
Smugglers particularly target the markets of those states where the rates of duty are high, the Commission points out.
Presenting the study yesterday, the Commissioner for the Single Market, Mr Frits Bolkestein, said that while he believed that excise rates ought to be brought closer together, there was no point in the Commission making a proposal to do so. "Without the agreement of all member-states, nothing can change," he said, and there was no likely agreement on what the level of minimum rates should be.
Currently there is no minimum level of duty on wine, and 12 of the 25 states impose no duty at all. The Commission notes that wine-producing countries regard the possibility of a zero rate of duty as a necessary measure to support agriculture. "The issue of wine taxation remains a very controversial and politically sensitive issue," Mr Bolkestein's spokesman said.
The level of duty on spirits is 10.99 per cent in Ireland, far ahead of the EU minimum rate of 1.54 per cent. In 15 states, the level of duty is below 3 per cent.
Figures published by the Commission show that in 2001 the duty on alcoholic drinks constituted 24.3 per cent of Ireland's excise revenue, compared with just 6.3 per cent in Germany and 7.7 per cent in France.
The Commission said that it hoped its study would lead to a debate in the EU on excise rates.