PART 1:executive summary
Taxes on fuel vary significantly across Europe, with
the UK charging by far the highest rate of duty. These differences
in fuel duty were at the root of the hauliers' protests in this
country and elsewhere in 2000. Last year, the Commission proposed
a Directive which would reduce or eliminate these tax differentials.
The proposal would harmonise tax arrangements for diesel fuel
used for commercial purposes and align the excise duties on petrol
and non-commercial diesel fuel. The Commission claimed that its
proposal would both eliminate distortions to competition and reduce
The proposal is controversial and received a negative
reception from the large Member States, who would stand to suffer
a large loss of government revenuethe UK Government have
estimated that it would cost the Treasury £2 billion per
The Committee found that, at present, because of
countervailing differences in other taxes and costs, the existing
differences in rates of fuel taxation do not serve to distort
competition in the haulage market.
The Committee accepts the need for minimum rates
of fuel duty in the EUespecially in the context of EU enlargementas,
without a floor, some Member States might set off a 'race to the
bottom', which would have a negative impact on government revenues
and the environment. The Committee considers that the requirement
for reasonable minimum rates has already been met by other legislation
(namely, the agreed Energy Tax Directive).
The Committee concludes that the Commission's proposal
to harmonise diesel fuel taxation does not contribute to making
transport users to face up to the real costs of transportfor
the EU as a whole, it would move taxation in the opposite direction
because it would reduce the average level of fuel duty and have
a negative overall impact on the environment.
The Committee therefore calls on the Commission to
withdraw the present proposal.