EU ministers to discuss lower VAT for environment-friendly goods

EU finance ministers will soon discuss plans by France and Britain to reduce EU-wide VAT rates on environmentally- friendly products, officials in Brussels said Friday. A spokeswoman for the bloc's taxation and customs union commissioner, Laszlo Kovacs, said finance ministers would begin debating the idea at a meeting scheduled for November 13 in Brussels.

At that meeting, government officials from France and Britain were expected to issue a joint proposal aimed at "applying reduced VAT rates on most energy-efficient goods", the official said.

"The (European) Commission is always open to study such proposals ... but we must be clear on which products (it should apply) and on the purpose of this measure, which should not distort the internal market," the spokeswoman said.

French President Nicolas Sarkozy on Thursday floated the idea of a lower EU VAT rate on environmentally-friendly products, as well as higher levies on goods imported from countries that do not respect the Kyoto Protocol, in front of an audience that included Nobel Peace Prize joint-winner Al Gore and European Commission President Jose Manuel Barroso.

Taxes are a generally sensitive issue in Brussels. And any plans to enforce obligatory VAT levels on certain products would require unanimity from all 27 member states.