The Finance Committee has removed a provision from the 2025 Finance Bill allowing higher taxation on electricity, while the proposed measure will still be discussed in parliament. Bercy announced a 9% tariff reduction for households, ending the previous tariff shield. Opposition voiced concerns about the tax’s impact on fuel poverty and fairness. Additionally, amendments were made concerning VAT on photovoltaic installations and a new tax on speculative electricity transactions, as lawmakers addressed urgent energy issues and public spending.
On Thursday, the Finance Committee eliminated a provision from the 2025 Finance Bill that would have allowed the government to tax electricity at a rate higher than prior to the energy crisis. Even though the LR party retracted its amendment for deletion, Finance Committee chairman Eric Coquerel (LFI) championed the cause, with support from both the Left and Rassemblement National. The government aims to generate 3 billion euros from this proposed tax, which will still be up for discussion in the assembly, where MPs will refer to the original proposal.
Bercy Promises 9% Tariff Reduction for Households
Bercy is set to end the tariff shield established during the inflationary period and is now offering a 9% reduction for households on the regulated sales tariff (TRV) and contracts linked to this tariff, as reported by a ministry source, thanks to decreasing energy costs.
In light of this, the Republican Right suggested an amendment urging the government to scrap its plan for an electricity tax increase. Instead, they advocated for further reductions in public spending and reiterated their support for Prime Minister Michel Barnier in his endeavors to rectify public finances.
However, MP Véronique Louwagie chose to withdraw this amendment during committee discussions, stating she required more details before the plenary session. She indicated a possible inclination to support other proposals aimed at capping the tax increase.
Criticism Over Fuel Poverty
The session saw significant criticism, particularly from MP Aurélien Le Coq (LFI), who labeled the proposed tax hike as ‘unbearable’ for the 12 million French citizens struggling with fuel poverty. Jean-Philippe Tanguy (RN) also condemned the tax as ‘unfair’, suggesting it disproportionately affects working and middle-class families compared to the wealthiest households.
Earlier in the discussions, another article concerning reforms to the preferential tariff for accessing nuclear electricity (Arenh), which is set to expire at the end of 2025, was also removed. Macronist MP David Amiel successfully introduced an amendment to standardize VAT on photovoltaic installations to promote growth in this vital sector of the energy transition.
Additionally, Socialist MP Philippe Brun managed to pass a 0.3% tax on speculative transactions involving electricity purchases and sales, a measure aimed at curbing speculation in energy pricing.
Enhanced Contribution on Inframarginal Rents
Finally, the MPs approved a more robust version of the ‘Crim’, a levy on the inframarginal rents of electricity producers reaping excessive profits as a result of soaring energy prices following the war in Ukraine. Although this tax was initially projected to raise 12.3 billion euros, it has not generated the anticipated revenue.
General rapporteur Charles de Courson (Liot) expressed skepticism regarding the measure’s effectiveness, suggesting that diminishing energy prices may reduce the tax base, thereby making it unlikely to generate significant funds.