Ecotax policy rejected

 
Last Updated: Saturday 04 July 2015

the French government's plan to introduce ecological tax reforms got a serious blow on December 28, 2000, when the country's constitutional court rejected a planned industrial energy tax. The ruling threatens the government's wider ecological tax reform programme.

The constitutional council's ruling was part of its review of the 2001 budget and related tax changes. The planned industrial energy tax included extension of the general pollution tax -- the tgap -- to include energy use by about 40,000 industrial consumers. The council stated that tgap was unconstitutional on two grounds. Firstly, tgap is 'contrary to the principle of equality' of taxation, because some lower energy consuming companies would end up paying more than other companies consuming more energy.

Secondly, the council said that since the main aim of the tax is to cut greenhouse gas emissions, it should not be applied to electricity, as France relies on nuclear power to generate electricity and, therefore, it is virtually carbon-free. The government should have instead evolved the tax to encourage the industry to switch from on-site fossil fuel use to greater electricity consumption, the council said.

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