TAXATION: FRANCE INSISTS ON REDUCED RATE OF VAT ON AUDIO RECORDS AND CASSETTES.

The Council of Education Ministers on May 5 and 6 is expected at France's request to discuss scope for applying a reduced rate of value-added tax on audio records (vinyl and compact discs) and cassettes, according to a memorandum from the French delegation to the Council. Paris is keen to include these products on the list in Annex H of the Sixth VAT Directive, which authorises the application of a reduced rate within those Member States that so wish. The European Commission should publish a report on the application of reduced rates of VAT in principle at the end of June, in anticipation of the next review of the Sixth VAT Directive (EEC/77/388) under the Italian Presidency during the second half of the year. For Paris, a reduction in VAT would encourage the cut in prices long awaited by the public, in particular young people, for whom music is the first cultural indulgence.

The anticipated effects of such a measure...