Posted Oct 13, 2022 10:08 AMUpdated Oct 13, 2022, 4:26 PM
After the “super profits”, the “super dividends”. On Wednesday evening, in the hemicycle of the Palais Bourbon, the deputies adopted an amendment to the Finance Bill for 2023 aimed at raising by five points, to 35%, the single flat-rate levy on dividends which exceed the average by 20% of those paid over the past five years. The “flat tax” on capital income introduced at the start of the previous five-year period is set at 30%.
The proposal is carried by the president of the Modem group in the Assembly, Jean-Paul Mattei. The government will therefore have a hard time not keeping it in the budget. Despite the requests for withdrawal from the Minister of the Budget, Gabriel Attal, and the rapporteur (Renaissance) Jean-René Cazeneuve, the amendment has indeed collected 227 votes in favor, for 88 against.
He received the support of the left-wing political groups members of the Nupes and the RN, but also of 4 elected LR and 19 Macronist deputies of the Renaissance, including Freddy Sertin, the substitute for Elisabeth Borne in the Assembly and Sacha Houlié. The elected representatives of Horizons mostly abstained.
The Modem explained that he was in favor of the European mechanisms for involving energy companies, defended by the government, but that it was necessary to go further.
Single flat-rate direct debit
“It seems necessary to encourage these companies – particularly those in the energy sector but also transporters as well as banks and insurance companies – to take advantage of these exceptional results to invest, in particular to face the very significant challenges posed and will pose in the medium term climate change to the planet, to our lifestyles but also, more concretely for these companies, to their business model”, one can read in the explanatory memorandum. The objective is to “discourage the distribution of these exceptional results by ‘super-dividends’ and ‘super-share buybacks'”.
Eric Coquerel (LFI), Chairman of the Finance Committee, supported the proposal, considering that simply adopting the European system for taxing fossil energy producers has too low a return: taxing refining activities will not bring than 200 million euros, according to Bercy.
Exceptional dividend
For him, this device pushed by the government “has the defect of almost leaving aside companies that make a lot of profits but do not declare them in France, like Total”, pointed out the Insoumis, judging that Jean-Pierre’s proposal Paul Mattei responds in part to the debate on the use of profits, which can be used to invest or remunerate shareholders.
In the line of sight, TotalEnergies which announced the payment of an exceptional dividend, after having generated nearly 11 billion dollars in profits in the first half. With its share buyback program, between 35% and 40% of cash flow will go to shareholders this year. But the oil giant also plans to deleverage and invest 18 billion per year in the energy transition by 2025.
The government, which should not resort to article 49.3 of the Constitution this week, as indicated by the Minister of the Economy on RTL, is in a very complicated situation. This increased “flat tax” goes against its policy of supply, but it will be difficult not to give pledges to an ally like the Modem.