The wise men of Rue Cambon deplore taxes that are inequitably distributed, not sufficiently optimized in terms of accounting and, above all, disconnected from France’s decarbonization strategy.
The energy crisis is finally behind France and energy prices are returning to their pre-war level in Ukraine. But this quasi-return to normal has brought to light a new problem: that of energy taxation in France. Last Friday, the Court of Auditors published an opinion in which it called for a modification of these energy taxes which brought in 60 billion euros to the State in 2021, a quarter of which is value added tax. They weigh more than 40% on the average annual bill which amounts to 3,140 euros per household.
This recommendation from the wise men of Rue Cambon is motivated by several pitfalls of energy taxation in France.
First of all, it is unequally distributed between consumer categories, whether according to the income level of individuals or between sectors exempted or not for professionals. Similarly, the State gives up 16 billion euros each year between the various adjustments to this taxation, from the differential between diesel and gasoline to specific taxes overseas, including the exemption of kerosene and marine fuel oil or even reductions on diesel for road transport.
A reform of the European carbon market that will increase energy prices
The Court of Auditors particularly points out a lack of coherence with France’s decarbonisation strategy by 2050, considering that energy taxation “is not designed as an energy and climate policy tool”. To modify this taxation, the magistrates are emphasizing communication, which must promote the social acceptability of the measures in order to avoid a new “Yellow Vest” movement that appeared in reaction to the “carbon tax” a few years ago.
Concretely, affordable low-carbon alternatives must be presented to taxpayers who must also be able to anticipate future changes. Finally, the wise men of Rue Cambon are calling for greater tax justice by making the wealthiest households contribute more and possibly by implementing “an exceptional tax on the highest incomes and/or highest assets”.
According to the Court of Auditors, this overhaul must not be delayed in order to reduce the consequences of the reform of the European carbon market, which could result in a price increase of “11 to 13% for gas and 10 to 11% for fuel” as early as 2027, according to its estimates. At the same time, the drop in gas and oil consumption will result in a significant reduction in tax revenues of 13 billion euros by 2030 and 30 billion by 2050.
