Konrad calls for VAT equality to lower car prices

Date: 07/02/02

RADICAL plans to shake up the way cars are sold across Europe may not result in prices falling, German MEP Christoph Konrad warned yesterday (6 February).

The rapporteur for the reform of the block exemption, which currently protects carmakers from competition rules, said the changes would only produce lower prices if VAT rates were harmonised across the EU.

'I support every effort to speed this up. We must seize this opportunity while the iron is hot,' he said.

He added that if rates were not harmonised, a system of charging 'country of origin' rates on car purchases should be applied. So, for instance, a consumer buying a VW Golf in Denmark, where VAT is much higher than in Germany, would only pay tax at the German rate of 16.

Although Konrad insisted that widespread criticisms of Mario Monti's proposals were 'not justified', he felt the car industry should be given more time to implement the new regime which is due to come into force in October 2003.

'I believe there is certain room for manouvre to extend this,' he said.'

Konrad added that the changes would provide more 'elbow room' for internet and supermarket car dealers.

Radical plans to shake up the way cars are sold across Europe may not result in prices falling, MEP Christoph Konrad warned on 6 February 2002.