French Employers' Federation Seeks To Delay Introduction Of Carbon Tax

by Ulrika Lomas, Tax-News.com, Brussels

11 January 2010

Despite being all too aware of the environmental stakes, the French employers' federation Medef has, nevertheless, urged the government to delay the introduction of the new carbon tax in France. Rather than striving towards the July 1 deadline, Medef has requested that the carbon contribution be included in the country’s 2011 finance law.

Medef maintains that the government’s plans currently contain clear injustices and inconsistencies, and argues that more time is needed to resolve the issues raised by the Constitutional Court and to carry out preliminary impact studies.

Given that the ultimate aim of the carbon tax is to protect the environment, and not to generate additional fiscal revenue for the government, and in view of the fact that individuals have been promised a system of compensation, Medef has called for the government to provide compensation for any business subject to the new contribution.

Medef has also argued that French industry is already subject to the European emissions quota system, which imposes a strict limit on carbon dioxide emissions, and already adds to costs. The introduction of a national tax would effectively double the fiscal burden on heavy industry, it notes, thereby gravely endangering the competitiveness of French businesses.

In view of recent efforts made to protect the country’s industry, Medef’s President, Laurence Parisot, has urged the government to allow more time to address the key issues.

Jean-Pierre Clamadieu, President of the sustainable development commission of Medef, has also emphasized the need to find “the right solution” to the Constitutional Court’s criticisms without endangering the competitiveness of the country’s businesses.

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