BRUSSELS-- The European Commission proposed Wednesday to gradually increase minimum taxation levels in the European Union (EU) on cigarettes, aiming to discourage smoking and fight smuggling.

    Under the plan, the excise duties levied on cigarettes must account for at least 63 of the price on average in 2004 from 57 percent currently, and they must be at least 90 euros (140 U.S. dollars) per 1000 cigarettes, compared to 64 euros (100 U.S. dollars) at present.

    "Today's proposal supports the EU policy to reduce tobacco consumption and narrow the differences in price levels of tobacco products within the EU," said Laszlo Kovacs, EU Commissioner for Taxation and Customs Union.

    According to the World Bank, price increases in tobacco products are the most effective single intervention in preventing smoking.

    The commission estimated that the increase of tax would contribute to a 10 percent decrease in tobacco consumption in most member states within the next five years.

    Despite EU requirement for minimum tax on cigarettes, considerable differences remained in taxation levels between the lowest and the highest taxing member states, which could be up to almost 600 percent of the excise burden expressed in euros, according to the commission.

    The great divergence in taxation levels encouraged intra-EU tobacco smuggling and cross-border shopping, which undermined the revenue and the health objectives of those countries which imposed high taxes to deter smoking.

    The proposals also updated the definitions of different types of tobacco products so as to remove loopholes which allow certain cigarettes or fine cut tobacco to be presented as cigars, cigarillos or pipe tobacco and therefore benefiting from a lower tax rate. Enditem