Raise VAT on bottled water? – Libération

Among the savings avenues suggested by the General Inspectorate of Finance is the elimination of a little-known niche: the reduced VAT on bottled water, which is only 5.5%, as basic food products. Raising it to 20% would bring in 100 million.

Bottled water, like all bottled non-alcoholic beverages, benefits from the reduced VAT rate of 5.5% reserved for basic food products. The spending review commissioned by Matignon from the General Inspectorate of Finance on public aid to businesses, and unveiled this week, suggests eliminating this advantage for water, which according to its calculations would allow the State to collect 100 million euros in additional taxes. The VAT collected on this sector would in fact rise to 300 million instead of 200 million, on a consumption of 3.3 billion euros per year.

If this increase were passed on entirely to the consumer, this measure would increase the bill by around 10%, with in-store prices varying from fifteen cents to two euros per bottle depending on the brand.

Bercy’s argument is that this tax would hit the wealthiest households in particular, the biggest consumers of bottled water. According to the “Family Budget” survey conducted by INSEE in 2017, “the richest 10% of French people represented 13.5% of bottled water purchases in value in 2017; the poorest 10% represented a share of 5.1%.”

“30% of packaged water in France is subject to treatment that does not comply with regulations”

The inspection is also based on environmental reasons. “In addition, this rate fa