A single measure to solve three problems: purchasing power, business support and ecological transition. This is how some sixty business leaders, including a number of start-ups, presented their suggestion for a “green VAT” in an op-ed published on 9 October in The Sunday newspaper.
They offer to “apply a reduced VAT rate to environmentally responsible products in order to relieve household wallets”. They would like this measure to be adopted as part of the examination of the 2023 finance bill, which begins Monday in the National Assembly, but which could also be “the subject of new negotiations at European level”.
Among the signatories, from numerous start-ups in the fields of tech or sustainability, are the heads of the Mouvement Impact France, Camif, Back Market, BlablaCar, Yuka, Le Fourgon, Vestiaire Collective and of Biocoop.
“It is no longer possible to submit to the same tax rules the companies which aggravate the environmental crisis and those which do everything to provide solutions. We also believe that it is urgent to encourage citizens to collectively turn to virtuous goods and services by making them identifiable and accessible to all”specifies the tribune.
Reduced rates for essential products
In France, value added tax (VAT) is the main source of tax revenue. Its standard rate is set at 20% for the majority of products and services. However, there are exceptions:
- its intermediate rate is set at 10% for catering, passenger transport, certain camping accommodation services, etc. ;
- its reduced rate is 5.5%, mainly for food products, books on any medium, gas and electricity subscriptions, etc. ;
- its super reduced rate is 2.1%, among other things for drugs reimbursable by Social Security and certain press publications.
The modulation of VAT on environmental criteria is a lever regularly proposed by economists. For example, it appeared in the program of several left-wing presidential candidates.
Reward the “social commitments of the company”
The signatories consider that “If a modulation of VAT were to be rejected by the government due to legal or budgetary constraints, it is essential that we introduce new tax rules as quickly as possible directly linked to the commitments of companies”.
“A modulation of 10% to 5.5% could also be implemented depending on the company’s social commitments inherent in the design of the product or service”they suggest, before committing “that this reduction in VAT does not lead to an increase in the margin for [leurs] companies, but concrete social repercussions”.