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Consumption, Marine Tondelier

VAT: Green VAT: reduced rates on essentials, increase on luxury and harmful goods

Direction of change: change of another kind, or uncertain direction, compared with current law.

The lever. Value added tax, paid on consumption: standard rate and reduced rates on certain products. Direction rule: ↑ heavier VAT.

« Adopter une TVA verte différenciée selon l’impact environnemental et sanitaire des produits. Diminuer les taux des biens de première nécessité et des produits respectant l’environnement (produits biologiques, réparation de l’électroménager, des cycles, des chaussures, des vêtements, transports publics… Augmenter les taux de TVA des produits de luxe ou nocifs pour la santé et l’environnement : produits ultra-transformés, restauration à emporter, hôtellerie de luxe, vols domestiques, rénovation non énergétique… »1

Translation by the editorsAdopt a green VAT differentiated according to the environmental and health impact of products. Lower the rates on basic necessities and environmentally friendly products (organic products, repair of household appliances, bicycles, shoes, clothing, public transport… Increase the VAT rates on luxury products or products harmful to health and the environment: ultra-processed products, takeaway food, luxury hotels, domestic flights, non-energy renovation…

Encoding

Position linked to an option of the cost schedule, with no parameter to set: see the costing.

Costing

Announced by the candidate

not announced

The programme does not cost this measure.

Published costings

none

No external costing of this position recorded to date.

Our calculation

+€2.5bn

per year for the public accounts, new revenue, range +€2.2bn to +€2.5bn.

The calculation

  • Home improvement and maintenance work (excluding energy renovation) at the standard rate of 20% instead of 10%: cost of tax expenditure 730213 (Voies et moyens, PLF 2026), static: Option costed by the source: a gain of €2.47bn (2.2 to 2.47) per year.

Assumption by the editors. Partial costing. Rates targeted by the Budget 2027 dossier: 20% for what harms the environment, 5.5% for what contributes to the transition. Costed: non-energy renovation raised from 10 to 20%, at the cost of the tax expenditure on works other than energy renovation (€2.2bn to €2.5bn, Voies et moyens). Not costed, for want of a published base: the cuts (rail and public transport, whose 10% rate is not a tax expenditure; organic products; repair of household appliances, bicycles, shoes and clothing; « première nécessité » [“basic necessities”]), and the other increases (takeaway food, not separated from eat-in catering; domestic flights; luxury hotels; ultra-processed products). The net balance of the reform may therefore be smaller, or even negative.

Current law, sources and limits of the cost schedule

Current law. Standard rate of 20% since 1 January 2014 (about 65% of taxable uses); reduced rates of 10%, 5.5% and 2.1%. Net yield 2025: €209bn for general government as a whole, of which €99bn for the State. Total net VAT forecast at €215.4bn in 2026 (PLF). A fraction also funds public broadcasting (compensation of €3.9bn in 2026).

Horizon. Full year, in 2025 euros; for 2032, of the order of +15 to +20% (assumption).

Limits. Unit costs from the DG Trésor (Trésor-Éco no. 371, September 2025, static, model based on the 2022 accounts aged to 2025): yield of one point gross (table 1) and net (table 2), by rate. Part of VAT is paid by public administrations themselves: the net figure deducts the resulting increase in public spending. Cost schedule rule: net at the centre and as lower bound, gross as upper bound (standard rate 7.5 and 8.9; 10%: 1.6 and 1.9; 5.5%: 2.0 and 2.4; 2.1%: 0.4 and 0.4, equal after the publication's rounding; all rates: 11.4 and 13.7, published totals, the sum of the rounded rates giving 11.5 and 13.6). EU law (VAT directive revised in 2022) also governs reduced rates on fossil fuels. Regressive effect: −0.7% of purchasing power for the first quintile and −0.4% for the last, per point. Targeted cuts (energy, essential products) are costed on the base of each product. VAT at 5.5% on energy: €11.3bn is the static costing of the Institut Montaigne (2024), on 2022 VAT revenue (€15.6bn at the 20% rate on petroleum products, gas and electricity). Its range of €9bn to €13.6bn adds a 20% variation in consumption and prices: it is not a static costing and is not counted. Since 1 August 2025, electricity standing charges have been taxed at 20%: the base concerned is broader than in 2022. According to the same source, a reduced rate on motor fuels is not permitted by the VAT directive (annex III); for gas and electricity, it requires the Commission's agreement. This option concerns VAT only; a cut in excise duties is costed under the “Taxes on fuel and energy” and “Electricity prices, European market” levers. VAT at 5.5% on energy: €11.3bn is the gross loss (Institut Montaigne, 2022 data); the DG Trésor note says nothing about energy: the centre applies the net-to-gross ratio published for the 20% rate, at which this base is taxed (7.5 / 8.9 = 0.843), i.e. €9.52bn (calculation; 9.40 with the ratio for all rates, 11.4 / 13.7). Montaigne points out that the VAT directive does not allow a reduced rate on motor fuels. Energy sources taken one by one (options “gas and electricity”, “motor fuels and electricity” and “motor fuels, electricity and gas”), editors' calculations: Montaigne details 2022 VAT at the 20% rate by product (petroleum products €10,478m, natural gas €1,282m, electricity €3,872m; table based on the SDES 2022 monetary energy balance); moving from 20% to 5.5% removes 72.5% of it (1 − 5.5 / 20), i.e. €7.6bn (petroleum products), €0.93bn (gas) and €2.81bn (electricity) gross, the sum of which gives back the €11.3bn; same net-to-gross ratio at the centre (0.843). Gas and electricity: €3.74bn gross, 3.15 net. Motor fuels: VAT on petroleum products minus that on households' heating oil (€4,478.6m of spending including VAT in 2022, series N139MMR of the long series of the SDES 2022 energy balance, i.e. about €746m of VAT at the 20% rate), i.e. €9,732m, and a gross loss of €7.06bn; with electricity, €9.86bn gross, 8.31 net. Motor fuels, electricity and gas, without heating oil: 7.06 + 2.81 + 0.93, i.e. €10.79bn gross, 9.09 net. The rest of the VAT on petroleum products other than households' motor fuels (about €0.4bn, heating oil and other products bought by purchasers who do not deduct it) remains counted with motor fuels: slight overestimate. Reduced rates (parameters “10%”, “5.5%” and “2.1%”): the yield of one point of each is published by the DG Trésor (net at the centre, gross as upper bound); this is a primary source that directly costs the point, with no coefficient to derive. Measured range: one point of change; beyond that (reduced rates merged into a single rate, for example), linear extrapolation, marked as such, which ignores behavioural effects, shifts in consumption between rates and the limits placed on reduced rates by the VAT directive. The “+1 point” options for a reduced rate are worth one step. End of VAT on fuel excise duty (option, 18 October 2026, editors' calculation): 20% of gross excise duty on motor fuels (€31.3bn in 2025, Voies et moyens of the PLF 2027) × share of road excise duty paid by households (63.5% in 2022: €18.4bn out of €29.0bn, SDES), i.e. €3.98bn at the centre and as upper bound; lower bound, same calculation on the 2026 forecast (€30.2bn), €3.8bn. This is the same household share as in the excise duty coefficient (“Taxes on fuel and energy” lever). VAT paid on excise duty by businesses, which is deductible, is not net revenue; that paid by public administrations and by purchasers who do not deduct VAT is not counted (slight underestimate). EU law (according to the government's answer published on 3 March 2020, the VAT directive requires excise duties to be included in the VAT base) is not assessed, as elsewhere in the cost schedule. Works other than energy renovation at the standard rate (option, 18 October 2026): cost of tax expenditure 730213 relative to the standard rate, €2,465m forecast for 2026 (centre and upper bound), €2,195m actual in 2024 (lower bound), static. The 10% rate on passenger transport is not a tax expenditure (Voies et moyens, volume II, p. 10): no published costing of a move to 5.5%. Takeaway food is not separated from on-site dining in tax expenditure 730221.

How to read these amounts. These are static costs and revenues, with no feedback effect, over a full year: nothing on growth, employment or the revenue that economic activity would gain or lose. A higher net cost does not on its own make a worse policy, nor net savings a better one: each programme rests on an economic model (demand-led stimulus, lower compulsory levies, consolidation of the public accounts…) that the cost schedule does not settle. GDP itself measures a volume of activity, not well-being or the usefulness of what is produced. Economic models and feedback effects.

This lever in the method · Costing for Marine Tondelier

  1. Pour une prospérité écologique – Le nouveau programme des Écologistes (Projet 2027), version 1 of 25 August 2026, p. 67. Open the document at this page.

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