Italian fuel tax exemption move opposed

EU Commission calls on governments to block "discriminatory" aid for certain hauliers

An Italian plan to exempt certain commercial hauliers from a recently introduced carbon dioxide (CO2) tax on diesel should not be permitted because it would discriminate against some Italian firms and all foreign ones, the European Commission has stated. Italy's move follows last year's introduction of a carbon tax escalator that is expected to raise excise duties on fossil fuels every year to 2005 (ENDS Daily 30 September 1998). Private diesel vehicles are effectively excluded from the tax increases through an equivalent reduction in "circulation tax surcharge". However, commercial diesel vehicle operators will see their costs rise. In response, Italy is seeking an exemption to a 1992 EU directive that sets minimum excise duty rates on mineral oils including road fuels that would apply to road haulage operators who carry goods on behalf of third parties. The Commission, however, expresses "fundamental objections" to the plan, which it says unfairly excludes own-account hauliers and would also create a new administrative burden on non-Italian hauliers "thereby having a discriminatory, adverse effect" on them. Tax differentials remain acceptable in principle, the executive notes in a communication to the Council of Ministers, but must be non-discriminatory as in the case of similar schemes in place in the Netherlands and France. EU governments will now have to decide whether to approve Italy's request or not.

Follow Up:
European Commission, tel: +32 2 299 1111. References: COM(1999) 459.

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