Friday, October 3, 2008

Romania defies Commission by lifting alcohol duties

EurActiv.com

The lower chamber of the Romanian Parliament has unanimously voted to eliminate excise duty on traditional home-brewed hard drinks, despite the very fact that it is required to collect excise on home-brewed alcohol under the terms of its EU accession treaty.

The vote to amend fiscal law took place last week. It eliminates excise duty on homemade pure alcohol up to a maximum quantity of 250 litres per household. The main homebrews in Romania are palinca and tuica (pronounced 'tsuica'), which has a lower alcohol content. The law will allow Romanians to produce up to 500 litres of palinca and 750 litres of tuica per year.

The European Commission declined to comment at this stage, because the adopted texts had not yet been obtained in Brussels today (3 October). But provisions in Bulgaria and Romania's Treaty of Accession to the EU state that lower excise duties (up to 50%) may only be introduced for 50 litres of pure alcohol per household in the case of Romania and 30 litres for Bulgaria. Above these quantities, the same minimum excise duty must apply as for all other alcohol produced in the Union: that is, 550 euros per hectolitre.

The vote is seen as a pre-electoral measure, coming ahead of parliamentary elections, which will take place on 30 November. The chamber also passed a bill to increase teachers' salaries by 50%, which prompted angry reactions from the executive. "Such a measure would bring about an unprecedented jump in inflation […] and a huge budget deficit," warned the Economy and Finance Minister Varujan Vosganian, quoted by EurActiv Romania.

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