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The taxation of inflationary profits is gaining more and more supporters in Southern Europe


Written by Gérard Tur on Tuesday, September 6th 2022 à 14:30 | Read 265 times


Italy, Greece and Spain have already taken the plunge in terms of taxing profits generated by inflation. The French government is hesitating.


More and more states are taxing companies that get rich thanks to the crisis (Phot: C.G.)
More and more states are taxing companies that get rich thanks to the crisis (Phot: C.G.)
MEDITERRANEAN. The debate about taxing the "super-profits" of companies profiting from inflation has not yet reached the southern and eastern shores of the Mediterranean. In the north, on the other hand, more and more governments are putting in place measures to recover some of the tens of billions of euros earned by a few large groups, while state coffers are being emptied to mitigate the effects of inflation.

Born of the post-Covid economic overheating, boosted by the war in Ukraine, inflation is affecting the whole planet and causing windfall effects for oil, energy and logistics groups. TotalEnergies has published a profit of €5.6 billion in the second quarter of 2022, up 159%. The Marseille-based shipping company CMA CGM announced a record net profit of €7.6 billion for the same period. In the first six months of 2022, the company generated more profit than in the whole of 2021, which was already a very good year. Engie has also more than doubled its profits in the first half of 2022.
 
The European Commission is in favor of an exceptional tax, as is the European Commissioner for the Internal Market. Thierry Breton believes that the "artificial profits made by energy players" should be partly deducted to "feed the budgets dedicated to limiting the impact of inflation on individuals and companies".

Who does what?

In May 2022, Italy decided to increase its "superprofit" tax, which was introduced in March 2022, from 10% to 25%. It targets energy giants and is expected to bring in €11bn.
 
In the same month, the Greek parliament voted for a 90% tax on windfall profits of electricity producers.
 
In July 2022, Spain announced a tax on the extraordinary profits of large energy and financial companies for 2023 and 2024. The country hopes to collect €3.5 billion per year.
 
In France, the debate remains heated. The left and the National Rally are calling for a tax on the "superprofits" of multinationals. In August 2022, a bill was tabled, and rejected, in the National Assembly. Part of the ruling majority seems to be in favour of it, but its right wing does not want to hear about it. The Prime Minister Elisabeth Borne is hesitating.



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