This follows objection from EU candidate countries including the Czech Republic, Poland and Slovakia, claiming that ‘quick changes’ to excise duties would result in steep price increases and strengthen the anti-EU lobby.
Excise duties on cigarettes in these countries are 42%, substantially lower than the EU rate of 57%, and an immediate increase in the rate, would result in the price of a box of cigarettes rise by between 30% and over 110%.
An EC official told the Financial Times: ‘We want fair play in the internal market. But we also know we would be playing into the hands of anti-European voices if we do not grant transitional periods.’
Czech ambassador the EU, Libor Secka said his country was not opposed to tax harmonisation, but a sharp increase in cigarette prices would ‘turn public opinion against joining the European Union’.
Similarly, a Polish official said the less well-off could not afford more expensive cigarettes. He added: ‘The anti-EU parties will have a field day.’
Report argues that the government must change the way it makes tax and budget decisions
Drastically fewer offices for HMRC in the hope to reduce their running costs
Tayabali Tomlin and d&t directors launch £20 a month TaxGo service, aiming to be the 'biggest UK firm' by client numbers
Companies must report on their complex financial structures including offshore accounts and notify HMRC