EU edges towards allowance rise

European Union finance ministers are considering a rise in the duty-free allowance to Eu430 ($565) from its current level of Eu175 ($220) for travellers arriving by air. Under the proposal, put forward by EU president Finland, the allowance for land travellers would rise from Eu175 to Eu300 ($379).

Reports suggest that UK chancellor of the exchequer Gordon Brown, who submitted proposals this year for an increase to £1,000 ($1,930), has responded positively to the suggestion. However, EU tax commissioner Laszlo Kovacs, who has proposed a raft of tax and customs changes, allegedly complained that pleasing all 25 member states is “difficult”.

All EU member states must agree to any changes in tax levels. As such, the lower rate recommended for land travellers is intended to persuade countries that border non-EU nations, where cheaper liquor and cigarettes attract EU shoppers, to ratify the proposition.

Meanwhile, the executive European Commission is trying to raise duty on beer and spirits to reflect inflation since 2004. Under the plans, duty on spirits would reportedly rise by 31%, although Finland has proposed a compromise rate of 4.5% on beer and other liquor products such as sherry.