Germany comes under fire over tractor fuel tax

Date: 28/05/03

GERMANY is under fire from the European Commission and customs officials across the Union for a tax clamp down on farmers living just outside its borders.

The Germans charge higher rates for diesel and have resorted to fining mainly Dutch farmers found using special low tax fuel in the tanks of their tractors or other vehicles. The low tax fuel is easily identifiable because it is coloured with red dye.

Frits Bolkestein, the commissioner responsible for tax and customs policy, said the Germans should allow the farmers to use the lower taxed fuel - provided they stump up the full tax rate if they need to fill up their tanks when they are on German territory.

A committee of national customs officials backed a compromise last month. But the Germans blocked the deal, said Bolkestein. A German court has referred the case to the European Court of Justice, added the Dutch commissioner.