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France increases VAT on pesticides

France has increased the value added tax (VAT) on pesticides from a “subsidised" rate of 5.5% to the standard rate of 19.6%. The measure was passed at the final reading of the draft finance bill for 2012 in the lower house of Parliament in December, reports the French association of maize producers, the AGPM. It says that although the measure will have an impact on cash flow, it will not have any net financial effect as the VAT on such purchases can be deducted. However, the association calls the measure “unfortunate”, as the rationale for the increase by MPs was that the lower rate encouraged the use of pesticides and was thus indirectly responsible for damage to the environment. That implied that the government was passing on propaganda from environmentalists and disregarding the real abilities that farmers have for making rational use of these products, it adds.


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