Lhe Russian-Ukrainian war has a major impact on the world economy, already weakened by the Covid-19 pandemic. In particular, it leads to soaring oil and gas prices, penalizing consumers and largely benefiting the energy sector: Shell and Total have tripled their profits in 2022 compared to pre-war. These rising costs are prompting governments to take measures to help households and businesses, including the adoption of a tax on “super profits”.
The idea is to tax “normal” profits at the normal corporate tax rate, and to tax profits more heavily surplus, resulting from an exceptional, unexpected gain, not linked to the investment or the capacity for innovation of the companies, but to an external event, of great magnitude, changing the market conditions.
Such an exceptional tax on superprofits has recently been adopted in Spain, Italy and the United Kingdom. It remains very controversial in France and was rejected by Parliament. Its opponents accuse it in particular of contravening two major tax principles: equity and efficiency.
The search for a balance
Indeed, the introduction of a sectoral tax poses a problem of unequal treatment of taxpayers since it can lead to companies with similar characteristics being treated differently. Moreover, if this selective taxation affects competition, it could, as such, be considered as State aid, going against the Treaty on the Functioning of the European Union, at the risk of sanctions from the Commission. European.
But such a tax on superprofits, thus considered unfair from a fiscal point of view, can at the same time play a major role in favor of social equity, by reducing inequalities that are detrimental to national cohesion as well as to growth. A necessity in a period when rising prices are causing a strong feeling of injustice, which can go as far as a challenge to the tax rules by the most negatively impacted taxpayers.
How to reconcile fiscal fairness and social fairness in such a context? One possibility is to adopt a general superprofit tax on all economic sectors, once the excess profits exceed a certain threshold. This is what was done by the countries that adopted a similar tax during the two world wars (about twenty countries including France, the United States, the United Kingdom, Italy, Germany or Canada).
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