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The yield of the tax on “super profits” revised downwards by economists

The Institute of Public Policy (IPP) updated this Friday downwards the yield of the tax on “superprofits” provided for in the 2023 draft budget, but its estimate is still much higher than that provided for by the government.

The update made by the PPI economists follows “the updating of the quarterly national branch accounts by INSEE” on 30 November, which reduced the value of the production of the coking-refining, where the government plans to tax the superprofits linked to soaring energy prices.

The “temporary solidarity contribution”, according to the name used by the government which refuses to increase taxes, would bring in according to new calculations of the IPP “between 1.15 and 3.9 billion euros, against 200 million euros. ‘euros for the government’s estimate’, according to the institute’s press release.

The IPP had estimated in mid-November the yield of the tax between 6 and 7 billion euros, on the basis of the accounts of Insee stopped a month earlier, at the end of October.

The “temporary solidarity contribution” plans to tax at 33%, instead of 25%, profits exceeding by more than 25% the average for the reference period 2018-2021 in the energy sector.

Asked by AFP, Bercy disputed the new estimate of the IPP, just as the ministry had already rejected the first, and reiterated its figure at 200 million.

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According to Bercy, “the difference between the two estimates results from the fairly strong simplifying assumptions made by the IPP”. The ministry notes that “a significant part of the added value of the major oil groups is not achieved in France” and does not fall within the scope of the tax.

The IPP has also revised downwards, albeit to a lesser extent, the tax proposed by the left alliance Nupes, which is not limited to the energy sector, but would concern all large companies making more than 750 million euros in turnover and whose profits are more than 25% higher than the average of those made between 2017 and 2019.

This tax would yield between 15.7 and 41 billion euros, against a range of 18.8 to 44.4 billion euros previously estimated.

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