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French 'sin taxes' should target health care goals

Monday, 24 March 2014   (0 Comments)
Posted by: Author: Ulrika Lomas
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Author: Ulrika Lomas (Tax-News)

A French Senate committee has called for the Government to rethink its so-called "behavioral" taxes on unhealthy goods to make its approach more transparent, and to link tax rates to goods' health impact.

The Committee pointed out the high number of parliamentary and governmental initiatives submitted over the last few years for new taxes, such as the sugary drinks tax, as well as increases to existing indirect tax levies on tobacco, beer, and spirits. The Government should look to link these levies and value-added tax (VAT) to health sector targets, and term the 'behavioral' taxes as 'public health contributions' to reinforce that the levies are to improve the health of French taxpayers, not solely to boost Government revenue.

The experts called on the Government to increase transparency, and to remove inconsistencies in the tax system. Next, they said that the objectives of each contribution should be clearly defined, emphasizing the health benefits of the charge, rather than the revenue gain.

The committee advocated harmonizing the tax rates applied to vegetable oils, and aligning the cigarette and roll tobacco tariffs. It recommended a 10 percent hike to the price of tobacco products over the next five years to cut smoking rates.

In addition, the group said that value-added tax breaks should be repealed for products subject to the public health contribution. Finally, it urged the Government to update the list of foods benefiting from reduced VAT rates after evaluating their nutritional content.

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