MEP poses tax-harmonization question

The European Commission has been asked whether it intends in the near future to propose the harmonization of excise duties on tobacco products within the union, so as to combat tax tourism.

In a preamble to a number of questions, French MEP Marie-Thérèse Sanchez-Schmid said that on March 14, 2013, the European Court of Justice ruled that France, by imposing strict quotas on purchases of cigarettes originating in other EU member states, had failed to comply with the rules on the free movement of goods within the countries of the EU. “The French National Assembly subsequently amended the tax code in relation to these quotas in December 2013,” she said.

“Consequently, since 1 January 2014, individuals have been permitted to bring 10 cartons of cigarettes and 1,000 cigars originating in another EU member state into France. The regulations also allow these new quotas to be applied to cars with five occupants, i.e., up to 50 cartons (10,000 cigarettes) and 5,000 cigars per vehicle.

“This is a matter of great concern for tobacconists in border regions: Cross-border purchases already account for between 15 percent and 20 percent of the French market. Every year some 500 million packs are smoked in France after having [been] purchased in Belgium, Spain, Italy or Luxembourg, the countries with the cheapest cigarettes in Europe.

“Purchases of this type correspond to an annual loss of some 2.5 billion euros in tax revenue.”

The MEP then went on to ask:

1. Does the Commission not believe that raising quotas to 10 cartons of cigarettes per person risks benefiting the black market above all else?

2. Could France reduce these quotas without infringing the ruling of the European Court of Justice, so that it may continue to fight against smoking and smuggling?

3. Does the Commission intend in the near future to propose a bill on harmonising excise duties on tobacco products in the Union in order to combat tax tourism?

The commission is due to answer these question in writing.