EC tries to thrash out common tax policy

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The Independent Online
BRUSSELS - European Community finance ministers meet this morning in the hope of striking a wide-ranging deal to bring into line in time for the 1993 single market taxes on products ranging from cut flowers to gold, writes Tim Jackson.

Although in theory it will be possible for member states to have different rates of VAT and excise after the EC's internal borders come down at the end of this year, some countries fear that their traders will lose business if large gaps remain between prices in one EC country and another.

From next January consumers should be free to buy things in any EC member state and bring them home in unlimited quantities without paying duty. Experts think they are most likely to exploit wide differences in highly taxed products such as alcohol and cigarettes and also in high-value products such as gold.

A package that has been under debate for many months appears likely to be wrapped up today.

Among expected compromises is an EC-wide minimum tax rate on spirits of pounds 4.28 per litre, which will force Spain to raise its taxes. Greece has already announced its intention to raise spirits taxes.