French taxman 'to target e-cigs and energy drinks'
Dan MacGuill · 12 Sep 2013, 10:38
Published: 12 Sep 2013 10:38 GMT+02:00
- 'Panic over e-cigarettes can harm more than help' (30 Aug 13)
- 20 million households in France 'to pay more tax' (27 Aug 13)
- French celebrate liberation from tax man (26 Jul 13)
According to a previously confidential working paper seen by French daily Le Parisien, the Socialist government of President François Hollande is considering a slew of new public health taxes to recoup €6 billion for the country’s massive social security system, which is set to reach a deficit of €14.3 billion this year.
On Wednesday the French Prime Minister announced "unprecedented" cuts in its next budget, admitting it will not meet its EU-mandated deficit target this year and that the economy will do worse than previously expected in 2014.
Despite emerging from a shallow recession in the second quarter, France is struggling to get its tepid economy back on track amid record-high unemployment, limited investment and low consumer spending.
And the government has also turned its attention to trying to fill the empty coffers of the country's social security system.
On the taxman’s radar? Electronic cigarettes, flavoured wines, energy drinks, and artificial sweeteners like aspartame.
For their part, Budget Minister Bernard Cazeneuve and Health Minister Marisol Touraine on Thursday both the denied the existence of such plans, but Le Parisien has in turn responded by reaffirming its claims.
‘Vaping’ has enjoyed a massive boost in popularity in France since the arrival of the e-cig from China a few years back, and there are an estimated half a million users in France.
After announcing a proposed ban on using them in enclosed public spaces in May, and a French study which last month found they were “potentially carcinogenic,” the government is reportedly now planning to tax them beyond the standard VAT rate of 19.6 percent.
Contrary to the well-known French tradition of Bordeaux and Côte-du-Rhône wine-making, the last five years or so have seen an explosion in the popularity of flavoured wines.
According to Le Parisien, some 16.5 million litres of “grapefruit rosé” and “peach wine” will be consumed in France this year – primarily by young people and women.
To protect the health of the younger generation, the government now plans to drastically increase taxes on these alcoholic beverages, which are often flavoured and sweetened artificially.
A bottle which now costs €2.50 in a supermarket, therefore, could set the flavoured wine lover back something closer to €10 by next year.
‘Premixed’ alcopops are already subject to a similar tax hike in France.
Brands like Red Bull, Monster, and Dark Dog may have found their place on French supermarket shelves in recent years, but they have long alarmed public health professionals due to their high levels of caffeine, sugar and other substances such as taurine.
Especially when mixed with alcohol, and consumed by young people (who are their primary enthusiasts), these energy drinks have been linked to several heart attacks and even deaths in France and beyond.
As an effort to dissuade the youth of France, Thursday’s leak suggests the government plans to impose hefty taxes on energy drinks, with the goal of bringing in €12.5 million.
It might not yet be a household name in France, but aspartame and aspartame-acesulfame salt are two artificial sweeteners on the radar of the French government.
Used primarily in diet soft drinks, aspartame is a sugar substitute that is hundreds of times sweeter than normal table sugar, but has been linked – along with aspartame-acesulfame salt – to lactation problems, cancer, headaches, and weight change.
Scientific studies have been contradictory on the safety of aspartame, but alarming enough, it seems, for the French government to crack down with a new tax on products containing the artificial sweetener.
According to Le Parisien, the government plans to bring in €12.6 million in additional tax revenue in 2014 through aspartame.