Sarkozy calls for suspending Europe-wide VAT on oil

French President Nicolas Sarkozy on Tuesday proposed capping value-added tax on oil across the European Union to help countries deal with the soaring price.

“I want to ask the question to our European partners: if oil continues to increase, should we not suspend the VAT taxation on the price of oil,” Sarkozy said in a radio interview.

He spoke as French fishermen kept up protests over high fuel costs launched three weeks ago and Spanish fleets went on strike to press demands for government compensation.

French consumers pay about 19.6 percent VAT on the price of fuel.

Yahoo!