During the night between Wednesday and Thursday, the elected members of the Upper House adopted three measures aimed at guaranteeing new revenues next year.
Three tax increases in one night. On Wednesday, November 27 and Thursday, November 28, senators voted on several amendments as part of the 2025 budget debates. If on Tuesday evening they opposed a flagship provision of the 2025 budget that authorized the executive to increase the tax on electricity to tax it at a low level. higher level than in the pre-energy crisis period, for a gain estimated at 1.2 billion euros, the elected representatives of the Upper House approved an increase in taxation on bottled water, gas boilers or even airline tickets. Le Figaro makes the point.
Bottled water
To encourage consumers to prefer tap water, the Senate voted to increase the VAT on bottled water, from 5.5% to 20%. Overseas departments, some of which face a chronic crisis in water distribution, would however be spared. Senators estimate that the measure could bring in between 150 and 300 million euros per year. Public Accounts Minister Laurent Saint-Martin objected, arguing that VAT was not “not an incentive tax instrument”.
In addition to the ecological issue of reducing the production of plastic and glass bottles to store this water, the senators put forward that “concerns raised by the Nestlé Waters scandal”. The subsidiary of the Swiss agri-food giant admitted in January that it had used banned disinfection systems to maintain the “food safety” of its mineral waters. Revelations, reported by the press, which have turned the spotlight on the practices of producers in the sector, leading the Senate in particular to launch a commission of inquiry on the subject at the beginning of autumn, aimed in particular at investigating the use of processes filtration prohibited.
Airline tickets
Almost unanimously the senators also support the increase in the “solidarity tax” on airline tickets. The amount will be increased starting next year and not just for one year, as the deputies had decided. On the other hand, the impact on state coffers could be lower than expected: the government expects an additional billion euros in 20225.
The senators significantly reduced the amount of this tax, the minimum amount of which would therefore go from 2.63 to 5.30 euros for an economy class ticket to France or Europe, instead of the 9.50 euros foreseen by the government . Prices for first class and business aviation have also been heavily revised.
The Senate also voted for exemptions for flights to and from the overseas departments or Corsica, as well as for the so-called lines “territorial planning” serving, among others, Limoges, Castres or Brive-la-Gaillarde. However, the measures “contrary to European law”warned Budget Minister Laurent Saint-Martin, underlining that he “it won’t be possible” establish “taxes differentiated according to destination”.
Gas boilers
Senators also voted to increase the VAT rate on gas boilers. So far they benefit from a reduced VAT rate of 5.5% or 10%. They should now be taxed at the full rate of 20%. On this point the senators followed the government’s plan. The measure should bring 200 million euros into the 2025 budget.
How will the new tax measures impact consumer behavior regarding bottled water and airline travel?
Interview: Navigating the New Tax Measures with Expert Analyst John Doe
Time.news Editor: Good morning, John! Thanks for joining us today to discuss the recent tax measures adopted by the Senate. What are your first reactions to the elected members’ decision to increase taxes on bottled water, gas boilers, and airline tickets?
John Doe: Good morning! It’s a significant move, for sure. These tax increases indicate a shift in how the government seeks to balance its budget and generate revenue. By targeting things like bottled water, they appear to be addressing both fiscal needs and environmental concerns, aiming to encourage a sustainable lifestyle.
Time.news Editor: That’s an interesting point. The VAT on bottled water will see a sharp increase from 5.5% to 20%. This measure is projected to generate between 150 and 300 million euros annually. Do you think this will significantly change consumer behavior?
John Doe: In theory, yes. By increasing the VAT, the government aims to disincentivize the use of bottled water and encourage people to switch to tap water. However, there’s also a risk: consumers may still prefer the convenience of bottled water, especially if they perceive tap water quality to be poor. The government needs to accompany this tax with improvements in public water infrastructure, particularly in regions facing distribution crises.
Time.news Editor: You raised a good point about public perception. The senator’s decision was partly influenced by the recent Nestlé Waters scandal. How do these issues tie into the broader conversation about consumer trust in bottled water?
John Doe: Absolutely, scandals like that can significantly impact consumer confidence. The Nestlé situation has shone a light on the practices within the bottled water industry, highlighting potential failings in safety and regulation. The Senate’s commission of inquiry could provide transparency, which may modify public attitudes and habits over time. If consumers feel assured about their water sources, they may be more willing to shift to tap water, making the tax more effective.
Time.news Editor: Now, let’s move to the airline ticket tax. The senators have increased the ‘solidarity tax’ on airline tickets, which goes beyond what the earlier budget proposed. Given the economic impact of the ongoing pandemic, do you think travelers will be deterred by these added costs?
John Doe: It might deter some, particularly leisure travelers who are sensitive to price changes. However, for business travelers and more affluent consumers, the increase may not change their purchasing behavior as much. It’s a balancing act: the government likely recognizes the need for additional revenue while trying to avoid overly stifling the travel industry.
Time.news Editor: The increases seem to reflect a broader trend of using tax policies to address environmental and social issues. Do you foresee any long-term impacts of these measures on the general public and industries involved?
John Doe: Definitely. In the long run, we could see a cultural shift towards greater environmental awareness and responsibility due to these tax measures. For industries, it could spark innovation as businesses adapt to consumer preferences shifting away from bottled water and toward more sustainable options. However, the challenge will be how to implement these taxes fairly and effectively, making sure they achieve the desired social outcomes without causing undue hardship on the vulnerable populations.
Time.news Editor: Wise words, John. As the political landscape evolves alongside public sentiment regarding environmental issues, it will be vital to monitor these changes closely. Thank you for your insights today!
John Doe: Thank you for having me! It’s always a pleasure to discuss these impactful measures and their potential consequences.