At the end of the interview with Marine Le Pen and Michel Barnier in Matignon, the first words of the president of the RN group to the National Assembly referred to a very specific measure of the 2025 budget: the increase in the internal tax on the final consumption of electricity. (TICFE).
This move, widely criticized in the weeks leading up to the official presentation of the finance bill, could play a crucial role in the final parliamentary debates on the budget. It could even, if necessary, constitute a turning point towards voting on a motion of no confidence against the government. We take stock of this famous increase in the TICFE and its potential repercussions in Parliament.
• What is the internal tax on the final consumption of electricity?
The electricity bill is divided into three main parts. Together with the network rate that corresponds to the TURPE (electricity network use rate) and the cost of electricity itself, taxes constitute the third “brick” of the electricity bill.
Inside is the transport tariff contribution (CTA) that “allows financing the specific rights related to old-age insurance of personnel covered by the regime of the electrical and gas industries”, as explained on the website of the Regulatory Commission of Energy (CRE). It also includes VAT, which is 5.5%, on the subscription and the CTA and 20% on the proportional participation for a subscribed power less than or equal to 36 kVA.
Finally, the TICFE is the old contribution to the public electricity service (CSPE) and is collected by customs. It now includes departmental and municipal taxes on the final consumption of electricity. Currently around 22 euros per MWh, the Government initially planned to raise it to 32 euros, which would have been its level without the establishment of the tariff shield to support households in the face of the energy crisis. But since the beginning of October, the executive has paved the way for an increase in the excise tax beyond 32 euros per MWh to generate 3.4 billion euros of additional revenue.
• What would be the consequences of increasing this tax on the invoices of the French?
So far, the Government has not determined the exact amount it would like to set for the TICFE as of February 1, 2025: it explains that it will depend on the price level of the electricity market at the beginning of next year. On the other hand, he wants the new amount of the special tax to guarantee a 9% reduction in the electricity bill for the approximately 22 million homes that have subscribed to an electricity offer at the regulated rate or indexed to it.
According to the Ministry of Budget and Public Accounts interviewed by AFP, your annual electricity bill should decrease by an average of 110 euros. However, this is a less significant reduction than that promised by former Minister of Economy and Finance Bruno Le Maire, who mentioned a range of 10 to 15% at the beginning of the summer.
For the 20% of households that have not opted for the regulated rate or an offer indexed to it, the increase in the TICFE will instead mean an increase in their bill on February 1, 2025. This is the case of those who have chosen a market offer at a variable price and indexed to other indices such as wholesale markets or the Arenh mechanism, but also six million households that preferred a market offer at a fixed price and that, by definition, will not benefit from the fall of market prices. But the price of these offers is currently around 20% lower than the regulated rate. In addition, these households can terminate their contract at any time to switch to the regulated rate.
• Why are parliamentarians mostly opposed to this increase?
The day after the presentation of the finance bill, the National Rally announced that it would present “a counter-budget” during the PLF’s examination in committee, evoking “very clear red lines” in the image of the electricity tax. Likewise, LR deputy Laurent Wauquiez quickly showed his opposition to the increase in excise taxes.
Even more surprising, several deputies from Together for the Republic (EPR) and Horizontes also presented amendments to remove the article on electricity taxation during the examination of the revenue part of the PLF 2025 in committee. The Finance Committee chaired by LFI MP Eric Coquerel ultimately rejected increasing the tax beyond its pre-Covid level before being followed by the National Assembly at the end of October.
Almost two weeks ago, it was the Senate Finance Committee that opposed the planned increase in the tax on electricity prices, to “protect purchasing power.” “Obviously it will be fully financed,” assured Jean-François Husson (LR), rapporteur of the general budget in the Upper House, who mentions, among other things, an increase in the gas tax to generate one billion euros of revenue. . Although senators have just approved the government’s draft budget for 2025, they are very likely to support most of the measures, but rule out increasing excise taxes on electricity.
• How does the government want to achieve this measure?
As part of the 2025 budget, the Government hopes to achieve an effort of 60,000 million euros to reduce the public deficit so that it goes from 6.1% in 2024 to 5% next year. Of this 60 billion euros, the government copy foresees 40 billion euros in spending cuts and 20 billion euros in revenue. With a forecast of around 3.4 billion euros, the increase in TICFE should generate one euro in every six of these expected revenues: demonstrating the importance of this measure in the executive budget.
To give guarantees to a cross-party opposition to this measure, Michel Barnier was in favor of a “meeting clause” to modulate the increase in excise taxes and stay within the objective of a global drop of 9% in regulated prices in 1 February for most French people. “In terms of electricity, we want there to be a meeting clause to configure the evolution of the tax based on the price of electricity, to guarantee that bills will really go down. The government is prepared (…) to assume this commitment,” said the Prime Minister before the National Assembly, in response to a question from the president of the right-wing republican group, Laurent Wauquiez.
At the beginning of October, the Minister of Ecological Transition, Agnès Pannier-Runacher, warned against “the risk” of going too far in increasing the TICFE and recommended not “going beyond” 32 euros per MWh, under penalty, in particular , to reduce the bill of certain modest French people who are not subject to the regulated electricity rate. Invited a few days ago to Good Morning Business, the Minister of Energy, Olga Givernet, was “very much in favor of the possibility of this variability, which is also proposed to be able to take into account market prices exactly on January 1.”
Source: BFM TV
