TAX NEWS - JUNE 2010

European Union Tax: EU plans green taxes to cut debt

The European Union could seize control of green taxes across the continent in order to make low-carbon energy cheaper

by Rowena Mason, 01 June 2010 -- Biofuels and wind or wave power would become less costly than energy produced from fossil fuels, under draft plans obtained by Reuters, the news agency.

The EU wants to overhaul Europe's €240bn (£201bn) annual taxation of energy, which varies between countries and often creates paradoxical incentives that encourage the biggest polluters.

Nations have traditionally resisted Brussels' interference on tax but the chance to overhaul levies has arisen because it could help indebted countries raise revenue without increasing income tax.

Under the draft plans, the new taxes would be phased in between 2013 and 2018, laying down minimum levies on fuels from coal to biodiesel.

The plans would hit industry hard at a time when heavy manufacturing is struggling to recover from the recession.

The EU declined to comment.