Abstract:

The abolition of customs duties in trade between member states represents certainly a loss of revenue which can be replaced by Value Added Tax which is the common tax in the Community. Customs duties collected by the member states under the CCT represent one of the Community's "own resources• and, subject to a 10 % deduction for administrative expenses, have to be remitted to the Community. Here again the VAT will compensate for the loss. Since only the VAT base is determined in a uniform manner according to Community rules the actual rate of rates are within the discretion of the member states. At present, until1992, 1.4 % of the VAT base has been designated as the Community own resource and this has to be remitted to the Community. However, in order to avoid penalizing countries where private consumption represents a considerable share of the national wealth, there is a limit of 55 % of GNP on the VAT base. Thus, in order to calculate the rate of the VAT to be set in Turkey in the event of joining the Community the government will have to take into consideration the potential loss of revenue as well as the anticipated financial commitment to the Community.

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