Tax hike: and now, VAT increases! Barnier's latest project

~img src=”https://img-4.linternaute.com/K2VEVdyioqEgBwrsE_fYhXV42yQ=/540x/smart/b4020c0a063d46c6a9919aa6838f00d2/ccmcms-linternaute/66412555.jpg” alt=”Increase in taxes: and now, VAT is increasing! Barnier's latest project” width=”540″ height=360> “Tax increase ts: and now, the VAT increases! Barnier's latest project”

The government does not seem to have finished with its plans to increase taxation ;eacute;.

The effort had to be moderate, contained, focused only on the most well-off. As the days go by, Michel Barnier's commitments melt like snow in the sun. The tax increases will hit the wallets of all households. The subtlety, compared to the Prime Minister's initial statement ? It is not exactly an increase in taxation but a surge in various taxes. While the forecast increase in a heavy tax on electricity is already being debated among the population and politicians, a new project has just been put on the table and seems just as flammable.

Les Echosclaim that Michel Barnier is proposing to quadruple VAT on electricity and gas subscriptions. Currently, it is 5.5% for this part of the bill. The Prime Minister is considering raising it to 20%, “in accordance with European Union law” according to the draft law. If this were to be confirmed, the electricity subscription would increase by around 20 euros per year for consumers and around 15 euros per year for gas.

In reality, the consumer will not pay more. The pure cost of electricity (price per kWh) will decrease so much from February 1st that the overall bill will drop, even if VAT and another tax (TICFE, read below) are significantly increased by the government. However, this does not prevent only 80% of French people from paying more, whereas the increase would have êbe around 15% in a few weeks, it will only be 9%.

In addition to VAT on electricity, Michel Barnier is also proposing to increase the Domestic Tax on final electricity consumption. This is a small line on your electricity bill, included in the total price paid. At the start of the war in Ukraine, it had risen to 1 euro/MwH. Since then, it has been increased little by little. small to reach the current level of 22.50 euros/MwH. The initial plan was that in 2025, it would be raised to its pre-crisis level of 32.44 euros/MwH. However, in order to obtain more revenue, it will be much higher in 2025 and will be around 50 euros/MwH.

Other measures include an exceptional tax on 65,000 fortunes earning more than 250,000 euros per year, an “exceptional participation” for two years, for large companies on profits that “make a turnover of one billion or more” (440 groups concerned), but also an increase in taxation on polluting transport, as well as a change in taxation for AirBnb rentals.

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Obviously, these are only the directions desired by the government. The bill will be debated in the National Assembly between October 21 and 25, followed by a vote on Tuesday 29, then the Senate will enter the race. Between the debates and the amendments, there is no doubt that the 2025 budget could still be significantly modified. Even if the government will have the possibility of forcing through with 49.3. At the risk of being knocked over…

Latest updates

10:21 – Taxes are rising sharply, but the electricity bill is falling: why ?

Despite the announced increases in VAT and TICFE, consumers will not pay more for their electricity. And will even save money. The pure cost of electricity (price per KwH) will decrease so much from February 1st the overall bill will go down, even if taxes go up. However, for 80% of French people, while the increase should have been around 15% in a few weeks, it will only be 9%.

10:17 – How much will the increase in this tax cost households ?

For example, for an apartment of 60m2 (consumption of 4800KwH/year), the annual amount of the TICFE (if it is at 50€/MwH) will increase from 120 to 288 euros. For a house of 100m² (10000KwH/year), it will increase from 250 to 600 euros per year. These are the average consumption levels established by Engie based on the types of homes.

10:11 – The main tax on electricity doubled

On the sidelines of the presentation of the 2025 budget on October 10, the government confirmed that electricity would decrease… but that the famous TICFE would increase. The exact increase will not be decided until the beginning of the year, but a line of conduct will be followed: “guarantee a decrease of at least 9% in the regulated electricity sales tariff as of February 1, 2025.” Bercy is working on a range of “around 50 euros/MwH”, while it is currently at 21 euros/MwH, more than double, and a level higher than that experienced before the energy crisis.

10:04 – By how much will this increase the cost of the subscription for individuals ?

If the proposed increase in VAT on electricity subscriptions and gas comes to fruition, this would represent an increase of around 20 euros on electricity and around fifteen euros for gas, for individuals.

10:00 – An increase in VAT on electricity and gas envisaged

This is the new rumor of the moment. According to Les Echos, Michel Barnier is considering increasing VAT on electricity and gas subscriptions. Currently at 5.5%, it would rise to 20% in 2025 to comply with European law, according to the draft consulted by the economic daily. A new increase in taxation affecting all French people is therefore to be feared.