THE European Commission said yesterday it could not rule out the possibility of some form of tax harmonisation among countries joining a common currency.

Responding to a report in the British newspaper, the Independent, that France and Germany were secretly preparing plans for a single tax system, a Commission official said: "I don't exclude that possibility . . . It is intellectually plausible."

The official cautioned, however, that it was wrong to interpret such a potential development as a further condition for qualification in economic and monetary union (EMU), a suggestion implied in the newspaper's article.