Plane tickets, gas boilers, bottled water: French Senate votes for tax increases

Tax increases on bottled water, gas boilers, and plane tickets were passed by the French Senate earlier this week as part of the voting on the 2025 budget. 

The Senate, which is the upper chamber of the French parliament, voted overwhelmingly in favour of increasing VAT on bottled water and boilers to 20%, up from previous levels of 5.5% and 10%.

It also voted in favour of increasing solidarity taxes on plane tickets although at a reduced level compared to what the government was originally asking for, as well as exempting certain flight routes and regional airports from the increase.

At the same time the Senate voted against plans to increase tax on electricity consumption, which would see an increase in household's bills. 

Read more: French electricity bills to drop by 14% after government U-turn on tax

It is not guaranteed that these tax increases will take place, as they will need to be included in the final version of the 2025 budget and passed by both the Senate and the lower chamber of the French parliament, the Assemblée nationale. 

The Assemblée previously rejected the government's budget when it examined it in the first instance. 

The original version, along with amendments favoured by the government, was then presented to the Senate. 

If there remains a stalemate in the lower chamber over various parts of the budget there may be an attempt to force it through without a vote. There is, however, a risk that Prime Minister Michel Barnier’s government could be toppled in this case. 

Read more: Why and when is the French prime minister at risk of losing his job?

Airline ticket taxes remain… but largely reduced 

Senators voted almost unanimously in favour of increasing the solidarity tax on airline tickets; however the final increase they agreed upon was significantly lower than government's original proposals. 

In the bill passed by the Senate the tax increase on European flights saw a reduction to €5.30 from the €9.50 originally envisioned. The current tax is €2.63 for a European flight.

A reduction to proposed taxes on private and business jet fares (aviation d’affaires) was also included in the bill. 

In addition flights to overseas French departments and the island of Corsica would be exempt from any tax increases, as would those to ‘regional development’ routes such as Limoges and Brive-la-Gaillarde. 

Ryanair has threatened to pull out of regional French airports over increased taxes. 

Read more: Ryanair threatens to end flights to ten regional French airports over tax plan

Despite the vote, the government may not be able to implement such changes even if passed in the final budget.

Differentiated taxes based on destinations and specific routes are “contrary to European law,” said Laurent Saint-Martin, minister for Public Accounts and one of the driving forces behind Mr Barnier’s original budget.

VAT increases

A tax increase on water bottles was not favoured by the government yet it passed easily in the Senate. 

An increase in VAT could bring in between €150 million to €300 million of extra revenue per year and ultimately reduce the consumption of plastic and glass. 

Senators referenced the Nestlé water scandal at the beginning of the year as part motivation for the increase.

Read more: More charges brought against bottled water firms supplying France

A bottle of water that currently costs €0.60 will cost €0.68 under the increase in VAT although producers may absorb some of this extra cost and not pass it on to consumers.

Similarly to airline taxes the changes will not be enforced in overseas departments.

Mr Saint-Martin said that VAT “was not a tax incentive” and should not be used so loosely. 

The Senate also voted through an increased VAT charge on boilers which was included in the original budget and is set to generate around €200 million in extra revenue per year.