The right-wing majority Senate voted Monday, against the advice of the government, to reduce the VAT rate in public transport for the equine sector or even margarine.
Proposals to reduce VAT rates are an essential exercise in the review of finance laws.
In the list proposed this year by senators for the 2023 budget, the upper house retained an amendment from the Regional Planning Committee, aimed at applying a reduced rate of VAT of 5.5% (instead of 10%) to public, rail, guide or road transport. But for a period of two years only.
Left and centrist senators have made proposals along the same lines.
If we do not act quickly, the supply of public transport will drop sharply and prices will explode for users, pleaded Philippe Tabarot (LR), stressing that we will thus be countercurrent in the face of the climate challenges that await us.
Rmi Fraud (PS) noted that this rate cut could be one of the avenues in response to requests from the president of the Ile-de-France region Valrie Pcresse (LR) to find additional funding for Ile-de-France Mobilits.
For 10 million Ile-de-France residents, this is a real subject: less supply is a hassle and in addition prices will increase, added the centrist Vincent Capo-Canellas.
Concerning the equine sector, another chestnut tree, the Senate voted an amendment to subject it to the intermediate rate of 10%.
The Minister in charge of Public Accounts Gabriel Attal agreed that there is no longer any European obstacle to progress (…) but there is an obstacle of public finances.
The arbitration is not to plan from this PLF for a reduction in VAT on all or part of the equine sector. I think we will come there because we are also pushed by the presidential majority, he added.
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The Minister recalled that the International Monetary Fund (IMF) had insisted on Monday on the extremely constrained nature of our public finances.
Since the beginning of the examination of the draft budget in first reading in the Senate, the losses of revenue pile up, he warned. The real estate tax reform is at this stage estimated at around 4 billion euros, inheritance tax is 1.4 billion at the very least, we have 115 million on margarine, 350 million on transport, 320 million on IS SME and we would have 180 million more on horses, he explained.
The Senate adopted an amendment to reduce the rate of VAT on margarine from 20% to 5.5%.
The government will be able to reconsider all these provisions in the continuation of the shuttle or by using article 49.3 of the Constitution the National Assembly.