Are cigarettes a problem for the proper functioning of the internal market?
Under Article 99 of the Maastricht Treaty the Community is charged with pursuing the harmonisation of indirect taxes, such tobacco excise duties, only to the extent deemed necessary for the funtioning of the internal market.The question was whether differences in retail prices would lead to extensive cross border shopping by consumers, following the removal of frontier controls and the opening of the European Single Market in January 1993. Since 1993 consumers have been allowed to buy almost unlimited quantities of tobacco for their own use ( with suggested ” limitative ” levels, below which use is assumed to be personal but above which personal use must be proved , of 800 cigarettes, 1 kg fine cut tobacco, 400 cigarillos and 200 cigars ) In its review of cigarette excise tax, the Commission observed that despite the existence of large tax-induced price differentials between Member States, there has been no general increase in the level of cross-border shopping since frontier controls
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