The reduction in VAT, not very effective in protecting purchasing power and fighting against inequalities, News/Actu Impôts

Called for by the RN, regularly debated, in particular since the rise in inflation, the reduction in VAT, on energy or food prices for example, would not be as effective as targeted measures – such as the tariff shield put in place by the government or the helicopter currency – to protect the purchasing power of the French, reduce inequalities or even raise “ environmental and public health challenges “.

In any case, these are the conclusions drawn by a report from the Council for Compulsory Levies (CPO), a public institution associated with the Court of Auditors, published on Thursday 9 February.

According to his investigation, a reduction in VAT, particularly on food products, is a less effective measure to support the purchasing power of low-income households than monetary transfers, because of the uncertainty about the rate of pass-through on prices and the impossibility of targeting certain categories of households through a reduction in VAT. »

Similarly, the proposal for an “environmental VAT” or one backed by “Nutri score” type food labeling – a measure notably defended last year by environmental MPs and business leaders, ” comes up against multiple obstacles, legal, economic and financial, which limit the possibilities of targeting and reduce its impact on the different stages of the value chain », Considers the CPO.

Main tax of the French tax system, VAT generated in 2021 a “ dynamic return of 186 billion euros in 2021 », i.e. 17% of the compulsory deductions.

Priority to the financing of public services

VAT must remain a yield tax with the priority objective of financing public services “considers the institution that” not recommended “the use of VAT reductions, ” general or targeted, to respond to the consequences of current crises and to long-term economic and social issues.»

“Non-targeted support measures for energy expenditure “, especially, ” must not, in any case, jeopardize the achievement of national environmental objectives, and can therefore only be temporary. »

For the COR, however, it is necessary to carry out in the longer term ” a general reflection on energy taxation “, to adapt the VAT and other indirect taxes (tobacco, alcohol, oil, etc.) with “thenational targets for reducing greenhouse gas emissions and protecting biodiversity “. Developments that would not be incompatible with temporary support measures for businesses and low-income households…

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