THE European Commission has signed the death warrant for duty free sales in the European Union which airports say provide vital revenue but consumer organisations say are often a rip off.
In a report to EU governments, the Commission said duty free and tax free sales should be abolished in 1999 as planned. An official announcement is expected on Monday.
The report from the European Commission will come as a major blow to Aer Rianta and other airport operators within the EU, who have campaigned vigourously for the 1999 deadline to be extended. Aer Rianta has already said that if duty free sales within the EU are abolished, then airport charges could rise to compensate.
The decision does not affect travellers leaving or entering the 15 nation bloc, only those moving within the bloc. But they account for almost three quarters of the estimated £3.5 billion earned from duty free sales each year. The report, which was adopted yesterday, also says duty free shops generally do not check that travellers are not buying more than they are entitled to under EU rules.
The purchase of goods without paying Value Added Tax or excise duties - usually at airports and aboard planes and ferries - should have been abolished in 1993 when the EU's single market was created. But EU governments agreed to a six year extension which is due to expire on June 30th, 1999.
The Commission has now said there should be no further stay of execution, making it virtually impossible to grant one as taxation issues have to be agreed unanimously by EU states.
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