The decree published this Saturday, December 28 confirms the absence of a tax increase desired by the short-lived Barnier government.
The price shield on electricity will end on February 1, but without the planned tax increase: a boon for households, who will benefit from a 14% reduction in their bill, in the absence of adoption of the budget.
According to a decree published this Saturday, December 28, the tax on electricity (excise) will mechanically rise on February 1 to its pre-crisis level, adjusted for inflation, i.e. 33.70 euros per megawatt hour for individuals compared to 22 euros currently. The decree therefore confirms the absence of an additional increase desired by Michel Barnier to clear the public accounts, the flagship measure of his finance bill which fell with censorship.
The planned increase would have brought in up to 3.4 billion euros into state coffers, but would have had the consequence of limiting the reduction in household bills to 9%. This emblematic measure had been forcefully contested in Parliament by both the RN and LFI and LR voices, fearing for users' bills.
In a final concession to avoid the fall of his government, Michel Barnier renounced this increase on November 28, without however avoiding censorship a few days later.
The decree published this Saturday “concerns the end of the tariff shield which was put in place following the large increases linked to tensions on the electricity market in 2022 and 2023”, was explained in the entourage of the Minister responsible for Industry and Energy, Marc Ferracci. “The tax increases provided for in the initial finance bill do not come into force” et “the drop in electricity prices should be, as announced by the Prime Minister on November 28, 14% in 2025”, we added.
For several months, electricity prices have fallen sharply on international markets and subscribers to the regulated sales tariff (TRV), i.e. 76% of households, will therefore benefit from this despite the end of the tariff shield. Small and medium-sized businesses subscribing to the TRV, whose excise duty will only be increased to 26.23 euros/MWh on February 1 according to the decree, will also benefit. For heating gas, the excise rate increases for 2025 to €17.16 per MWh compared to €16.37/MWh in 2024 and €8.37/MWh in 2023.
Advantages and disadvantages
The absence, for the moment, of a 2025 budget, a consequence of the censorship of the Barnier government on December 4, has advantages and disadvantages for the French. On January 1st, there will be only one “special law” only authorizing the government to raise taxes and spend credits on the basis of the 2024 budget, without the possibility of new measures.
The abandonment of the additional increase in the electricity tax is part of the good news. Like the absence of deindexation of pensions, all increased by 2.2% on January 1st. Nor, for the moment, has there been any delisting of certain medications or the elimination of 4,000 teaching positions.
On the other hand, without a new budget, 380,000 new households risk falling into income tax, with millions paying more due to the lack of indexation of the scale to inflation. Commitments favorable to farmers, the textile sector, or the increase in credits from sovereign ministries are suspended for the moment. Likewise, aid to overseas territories, the reduction in VAT in Martinique and Guadeloupe or the loan of a billion euros to New Caledonia, which are blocked in the pipeline.
Another disadvantage for millions of employees: restaurant vouchers can theoretically no longer be used on January 1 for food shopping. It remains to be seen what the budget that François Bayrou wants to be voted on in February will include, or not, and whether the government will be censored again, in which case the special law would continue to apply.
