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France’s boomerang tax on flour

Gill Hyslop

By Gill Hyslop+

23-Dec-2016

France's unpopular flour tax, which has been in existance since 1962, does not want to go away. Pic: ©iStock/ivanmateev
France's unpopular flour tax, which has been in existance since 1962, does not want to go away. Pic: ©iStock/ivanmateev

The unpopular ‘Taxe Farine’ has reared its head again, after being supressed last month.

France’s Finance Committee of the National Assembly reinstated the country’s flour tax in a new reading of the budget for 2017, despite a virtually unanimous vote in November to abolish the tax, which has been in place since 1962.

To compound matters, the Government also tabled an amendment to reallocate the flour tax to the compulsory supplementary pension scheme for non-salaried agricultural workers of the CCMSA (France’s department for agricultural social security).

Who should bear the brunt of the burden?

This is an unpopular move among French millers, who have criticised “the manipulations of the government.”

However, the committee said the eradication would penalize the Caisse Centrale de la Mutualité Agricole (CCMSA) that benefits from the taxes contribution of nearly €62m annually.

According to Valérie Rabault, MP, Socialist Party, without “real financial compensation … the suppression of the tax on flours would result in an imbalance in the financing of the social protection of farmers, which would not be a good solution.”

On the contrary, ANMF, the National Association of the French milling industry, has argued the government is placing the loss of receipts of the CCMSA on the shoulders of the millers.

Sorting the wheat from the quaff

“We denounce such manipulations when it comes to the very preservation of a profession; a sector of activity,” ANMF president Lionel Deloingce has stated.

"The non-abolition threatens 6,000 direct jobs and 35,000 indirect jobs; local jobs that cannot be delocalised.”

Against a background of poor wheat harvests – especially those in 2016, which saw an historic drop of 30% in soft wheat crops, used to make bread – the French millers have been demanding the €15.23 per ton flour tax be scrapped for several years.

The ‘Taxe Farine’ is applied to flours and related products intended for human consumption.

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