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New Tax Proposal

Nov 27, 2006 - European Union Tax Commissioner Laszlo Kovacs has a new proposal to boost the EU beer tax.

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Germany has led opposition to increasing taxes, which any member can effectively block. That proposal called for a 31% increase, reflecting the impact of inflation since 1992.

Kovacs has proposed basing the excise increase on 2004 prices, since that is when the EU expanded. At the time, many new member states were required to increase the excise on alcoholic beverages in order to conform to EU norms.

"The compromise solution would be to take another starting point, the point of accession of the 10 new countries - that is a reasonable proposal but I don't know whether it can be acceptable," Kovacs said.

Under his proposal, taxes would go up 4.5%.

"That would not force Germany to raise the price of beer," he said. German excise tax on beer is already more than 4.5% above the minimum rate required, he added.


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