In Martinique, the octroi de mer is a tax that fuels the anger of the inhabitants against the high cost of living

OVERSEAS – The anger is growing in the Antilles. After several nights of urban violence, in a context of strong mobilization against the high cost of living since the beginning of September, a specific tax is crystallizing a good part of the anger of the inhabitants of Martinique, but not only.

According to INSEE data for 2022, the price differential between the French overseas departments and mainland France is considerable. This gap is around +14% in Martinique. For food, it is even worse with prices 40% higher, due to a particularly expensive circuit before landing on the shelves in Martinique.

It is for these reasons that the questioning of the octroi de mer, this tax applying to imports in Guadeloupe, Guyana, Martinique, Mayotte and Reunion is now on everyone’s lips.

What is the purpose of the sea tax?

A vestige of the taxes collected from the 17th century onwards at the entrance to French colonies, the octroi de mer has been a measure that has enabled local authorities to be financed since 2004. In 2022 alone, it generated 1.64 billion euros in revenue for the five overseas departments and regions according to the Court of Auditors, providing 32% of the municipalities’ resources. Except that there is a downside: this tax boosts prices.

This famous tax “theoretically serves to protect local production to empower these territories, and above all to finance local communities”explains to AFP Frédéric Ducarme, secretary general of the Sciences Po Overseas Chair. “But when the sea tax rates apply to imported products that do not have their equivalent locally, we end up with absurd situations. People need to buy imported products that are the most expensive.”observes Ivan Odonnat, president of Iedom, the organ of the Bank of France in the overseas territories.

This situation is reflected on social networks by testimonies of residents forced to buy butter for 8.49 euros, a pound cake for almost nine euros or organic eggs for 7.29 euros, as you can see below.

Enough to make the first president of the Court of Auditors, Pierre Moscovici, say that although he is not the only cause, “the sea tax plays a significant role” to the high cost of living in Martinique. Others like Frédéric Ducarme see it more as a “scapegoat” and mainly target the cost of transporting goods.

A tax “out of breath”

Whatever happens, this only serves to reinforce the debates on the future of this tax. The president of Iedom opts instead for a change of model, based this time on “more competition”, “a coherent and stable taxation”as well as consideration of less distant supply routes.

As pointed out The Crossexperts have also proposed to the prefect of Martinique to reduce the sea tax, while others want to eliminate it altogether. “The problem is that if we were to remove it, we would have to replace it with a VAT (the VAT rate is lower in certain overseas departments and territories, Editor’s note) which would also affect local productions”notes Frédéric Ducarme, however.

So what should we do? In its March 2024 report, the Court of Auditors recommended a reform “in depth” of this tax, judged “out of breath”. But while waiting for a reform that will not arrive any time soon, the executive council of Martinique declared itself on September 11 in favor of the “elimination of sea tax rates on 54 product families”.

The new French Prime Minister Michel Barnier has also been called upon by the community leaders to ensure that Martinique obtains “price freeze”, “the removal of VAT on 54 product families” or even “the supervision of margins for importers, wholesalers and distributors”. A short-term solution, the objective of which for the State, distributors and communities concerns a “20% drop in price on average” of 2,500 basic necessities.

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