France eyes tax increases for green spending

PARIS: France is looking to raise €2.5bil (RM12.63bil) through 2030 via higher taxes on the operators of toll road and airport concessions as it seeks to speed up debt reduction and fund the environmental transition, according to a report in Les Echos.

The French government wants to generate an additional €100mil as early as next year by lifting taxes on airline tickets, mainly in first and business class, to help finance rail transport, the newspaper added, without identifying the source of its information.

Shares in Aeroports de Paris, which operates Charles de Gaulle and Orly airports, fell 2.99% in Paris last Friday. Toll-road operators Vinci SA slipped 1.92% and Eiffage SA declined 2.36%.

Countries in Europe have weighed new taxes to fund policies to make their economies fit for the green transition and to deal with heavy debt loads. Italy announced a windfall tax on banks’ profits earlier this month, matching a similar measure floated by the Spanish government.

A spokesman for the Finance Ministry declined to comment, given the budget bill for next year has not yet been finalised. Representatives for Vinci and Eiffage didn’t immediately respond to requests for comment.

Transport Minister Clement Beaune said at the start of the summer that the government was exploring ways to raise highway operators’ financial contributions to the green transition. His ministry didn’t answer requests for comment last Friday.

The French government is looking at including airports in the plans, which would be part of the budget bill for next year, as it wouldn’t be legally possible to tax highway companies and not those in other areas of transportation, Les Echos reported.

Aeroports de Paris operates under a different legal framework than regional airports, however, and this is yet to be resolved, it added. A spokeswoman for the group declined to comment, saying it doesn’t have any details about the transport concession tax.

Airline Air France-KLM said it’s not opposed to taxation but added that “the group calls for the sums levied to be used to accelerate the decarbonisation of aviation, which requires heavy long-term investments”.

The government is trying to shift to an era of tighter budgets after massive spending during the Covid pandemic and energy crisis, and aims to accelerate the reduction of debt and reduce its budget deficit.

Finance Minister Bruno Le Maire said last month that billions of euros of promised tax cuts would be introduced more slowly than previously planned. — Bloomberg