Modelling of fuel taxes in France - Institute of Public Policies

Context

Fuel taxation is a key component of the French tax system for several reasons. Firstly, revenue from the TICPE (Domestic Consumption Tax on Energy Products, which includes fuel taxes) represents the state’s fourth-largest source of income. Statistical studies also show that these indirect taxes are, on the whole, regressive, which raises questions regarding redistribution. Finally, in the fight against climate change, fuel taxes are a major tool for reducing carbon emissions.

Presentation

The primary aim of this project is to model fuel taxes as closely as possible to the legislation currently in force. INSEE’s ‘Household Budget’ surveys provide data on households’ annual expenditure on fuel; using this information, we seek to estimate the quantities consumed for each type of fuel. Determining these quantities is crucial for the second stage of our work: using our microsimulation model, we examine the impacts (carbon emissions, redistribution, government revenue, etc.) of various possible tax reforms, and in particular the introduction of a carbon tax on fuels.