The Minister of Budget, Laurent Saint-Martin, stated that he is not in favor of an increase in the taxation on gas, contrary to what was proposed by the Minister of Ecological Transition and Energy, Agnès Pannier-Runacher. The latter had mentioned on Friday that the government would be suggesting an amendment to the budget bill to raise the taxation on gas, but Saint-Martin clarified that the current budget proposal does not include such an increase and he is against the idea.
During a press conference on Friday, Agnès Pannier-Runacher explained that the government is looking into ways to increase taxes on gas and airplane tickets, as well as eliminate certain tax reductions such as the reduced VAT rate on the installation of fossil fuel boilers, in order to align prices and signal the importance of moving towards decarbonized solutions. She emphasized the need to avoid making carbon-intensive solutions cheaper than decarbonized ones, especially in light of recent increases in electricity taxation.
The government’s budget proposal also includes plans to increase taxes on electricity to ensure a 9% decrease in regulated prices by 2025 starting from February 1st. This move aims to offset the removal of the price shield implemented during the energy crisis in 2021 to protect French consumers from rising energy costs. The Minister of Budget noted that the increase in electricity taxation was necessary due to the temporary elimination of taxes during the inflation crisis, and now that inflation is under control, the government needs to adjust its fiscal policies accordingly.
In response to the statements made by Agnès Pannier-Runacher, the Minister’s office maintained that the proposed amendments align with the government’s overall strategy as outlined in the budget bill. The goal is to create a coherent pricing structure that favors decarbonized solutions over carbon-intensive ones, in line with France’s commitment to reducing greenhouse gas emissions and transitioning towards cleaner energy sources. This approach is seen as essential in promoting sustainability and combating climate change.
Laurent Saint-Martin emphasized the importance of ensuring a balanced approach to taxation and pricing, particularly in the energy sector. With the government’s focus on reducing electricity costs for consumers while maintaining fiscal sustainability, adjustments to tax policies on gas and other fossil fuels may be necessary to achieve the desired outcomes. By carefully weighing the impacts of taxation and pricing on different energy sources, the government aims to encourage a shift towards renewable energy and lower carbon emissions.
Overall, the discussions surrounding tax proposals on gas, electricity, and other energy sources highlight the government’s efforts to align fiscal policies with environmental objectives and consumer interests. With a focus on promoting decarbonization and sustainability, the government seeks to strike a balance between lowering energy costs for consumers and ensuring a level playing field for different energy sources. As the budget bill progresses through the legislative process, further debates and adjustments may be made to address concerns and optimize the effectiveness of tax policies in achieving national energy and environmental goals.
