What is the “octroi de mer”, this tax which fuels the anger of the demonstrators?

A specific customs tax applies to imports into Guadeloupe, Guyana, Martinique, Mayotte and Reunion. The Court of Auditors describes the tax system as “out of breath”.

Since the beginning of September, Martinique has been living to the rhythm of demonstrations against the high cost of living. On the island, a curfew has been declared in certain districts of Fort-de-France and Lamentin, and the prefect has announced the arrival of reinforcements to the police. If “demonstrations and protest rallies” have been banned in four municipalities on the island, including Fort-de-France, since Friday, September 20, a festive procession paraded through the streets of the prefecture of the overseas territory on Saturday evening.

One of the oldest customs taxes in the French tax system, called “octroi de mer”, is at the heart of criticism. Created in 1670 in Martinique, initially under the name of “droit des poids” as explained on the Senate website, this form of taxation was initially intended to apply for a limited time. It was Colbert, then Louis XIV’s Comptroller General of Finance, who made it permanent. This specific tax now applies to imports into Guadeloupe, Guyana, Martinique, Mayotte and Réunion. It concerns a large number of goods, with a variable rate depending on the product. For example, most biscuits are taxed at 15% if they are imported, but only at 2.5% if they are manufactured in Martinique. For cigarettes, the tax rises to 50% if they are imported. The documents listing the various octroi de mer in the overseas territories are nearly 1,200 pages long.

This tax “theoretically serves to protect local production to empower these territories, and above all to finance local authorities”explains to AFP Frédéric Ducarme, secretary general of the Sciences Po Overseas Chair. “It represents almost a third of the municipalities’ resources”noted in March the head of the Court of Auditors, Pierre Moscovici.

In 2022, according to the Court of Auditors, this tax generated 1.64 billion euros in revenue for the five overseas departments and regions (DROM), providing in particular 32% of the resources of the municipalities. “It actually covers almost half of the personnel costs of the municipalities”explained Pierre Moscovici in March.

The downside is that this particular tax inflates prices. Although it is not the only cause, “the sea tax plays a significant role” the cost of living, assured Pierre Moscovici.

“As regards the high cost of living, the negative impacts of the octroi de mer on the price level are proven (of the order of 5 to 10% average additional costs).”

Pierre Moscovici, first president of the Court of Auditors

during a speech in March

“When the sea tax rates apply to imported products that do not have their equivalent locally, we end up with absurd situations. People need to buy imported products that are the most expensive.”observes Ivan Odonnat, president of Iedom, the organ of the Bank of France in the overseas territories.

During demonstrations, this tax is very often denounced as one of the factors in the high cost of living on the island. “We should reduce the sea taxdemanded Patricia, met by franceinfo on Saturday at the exit of a hypermarket in Fort-de-France, her arms laden with shopping. The prices are too high. I don’t know who benefits from the crime.” “We need to remove taxes and the prices will be affordable,” abounded a protester from the Rally for the Protection of Afro-Caribbean Peoples and Resources (RPPRAC), the collective at the origin of the social movement, by building a roadblock near the Carrefour Market in Le François.

Aude Goussard, secretary and founding member of the RPPRAC movement, wants to be more nuanced. She warns: “We need to review the taxation system which creates inequalities, but the octroi de mer also directly finances local authorities. And we do not want to see a weakening of the latter, nor of social assistance.”

Through this anger against the sea tax, the demonstrators are nevertheless demanding increasing commercial autonomy for Martinique, like Julien, a 59-year-old civil servant: “We are still in a colonial system, we must change that, all together.”

“The békés who own all the supermarkets, the State gives them money. France must leave part of the management to Martinique.”

Julien, Martinique protester against the high cost of living

to franceinfo

In addition to provoking the anger of some of the inhabitants of Martinique, “the octroi de mer is a generally unstable regime, unpredictable, marked by excessive complexity and characterized by low transparency”pointed out Pierre Moscovici during his presentation on this tax in March. “This old taxation is now at the end of its tether. (…) We highlight the risk that the octroi de mer will permanently lock the overseas territories into an economic and social model that has little promise for the future.”he warned.