Alcohol: towards a price increase in 2024? What we know about the government’s plan to raise taxes next year

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The government plans to raise taxes on bottles of alcohol, which would increase their selling price, what does that mean?

What tax are we talking about?

In France, alcohol is subject to VAT, up to 20%, but in addition to this tax, alcohol and alcoholic beverages are subject to excise duties, which correspond to indirect taxes on consumption, in the same way as tobacco and oil. This tax is indexed to year N-2 inflation. In 2024 it could be based on the year N-1, i.e. 2023, the year marked by the price hike. But the increase in excise duties is limited to 1.75%.

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What change?

The main change is that the tax will be calculated on the previous year, and no longer on the year N-2 as it is today. The change has already been made for tobacco, which explains the increase in some packets this year.

What increase?

If the increase is registered, this could result in a 0.3 cent increase on the price of a bottle of wine and a 1-2 cent increase on stronger spirits.

What are the next steps?

This increase, in order to be implemented, will have to be presented and studied in September during the examination in Parliament of the draft law for the financing of social security for 2024.

Why such an increase?

This measure had already been proposed on June 2 by the Social Affairs Committee of the National Assembly. The information report hoped that “the prices of excisable products should not change less rapidly than those of everyday consumer goods”. Capital indicates that the tax could fill the state coffers with a few hundred million euros.

What reception from professionals?

The announcement is enough to arouse the concern of professionals in the sector, in fact Emmanuel Macron had promised them during his first five-year term not to increase taxes on alcohol.

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