French Government Determined To Modify Carbon Tax

by Ulrika Lomas, Tax-News.com, Brussels

04 January 2010

French Finance Minister Christine Lagarde has announced the government’s intention to swiftly amend its carbon tax plans, and to draft a revised “corrected” text in line with recommendations laid out by the country’s Constitutional Court.

According to the Finance Minister, the government aims to re-examine certain provisions contained in the text relating to exemptions accorded to heavy industry in France.

Other exemptions and special dispensation measures – notably those in favor of the agricultural and transport industry – would not be revised, Lagarde confirmed.

Lagarde’s announcement follows the recent decision by the Constitutional Court to declare the new carbon tax – which was to be introduced in France on January 1 – to be unconstitutional.

The Court had fiercely criticized the government’s decision to grant heavy industry – in other words, the highest polluters – exemption from the new carbon tax, arguing that the industrial sector does not have to pay for carbon dioxide emission quotas at European level until 2013. It claimed that 93% of emissions from industrial sources would be exempt from the tax.

The French government aims to present a revised text to the Council of Ministers by January 20.

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