Reduce VAT on electricity to 6% permanently? On condition of increasing excise duties, says Alexia Bertrand

Excise duties are taxes you pay on products like tobacco or alcohol. By increasing excise duties, “you have more leeway to conduct a more targeted policy“, continue Alexia Bertrand.

Would increasing excise duties therefore make the permanent reduction in VAT on electricity budget-neutral? In other words, would it cost nothing thanks to the revenue generated? This is what the federal government wants to strive for. “Inevitably, excise duties will generate revenue“replies the Secretary of State. “You have to watch this at cruising speed“, on the long term, “because it depends on several criteria starting with the prices.”

The revenue generated will therefore depend on the amount of the increase in excise duty but also on the way in which it will increase over time. “And they’re not going to increase all at once”, says the Secretary of State. “This will be done gradually.”so they will gradually increase.

We must go further

The budget is therefore not yet very clear. And excise duties will not suffice in the long term because our population is aging and therefore the expenditure on pensions is constantly increasing. For the European Commission, major reforms are needed: pensions, the labor market and taxation. Gold, a pension reform has already been enacted by the federal government but “We must go further“, admits the Secretary of State.

The cost of aging is only increasing. We have to look at this in the long term. These are costs that will continue to increase in the 2030, 2040, 2050 deadlines… We will therefore have to reform pensions if we want the social security system to remain sustainable. It is the objective“, concludes the liberal.

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