Octroi - Tax Farming

Tax Farming

From an early time the octroi was farmed out to associations or private individuals, and so great were the abuses which arose from the system that the octroi was abolished during the French Revolution. But such a drastic measure meant the stoppage of all municipal activities, and in 1798 Paris was allowed to re-establish its octroi. Other cities were allowed gradually to follow suit, and in 1809 a law was passed laying down the basis on which octrois might be established. Other laws were passed from time to time in France dealing with the octroi, especially those of 1816, 1842, 1867, 1871, 1884 and 1897. By the law of 1809 octroi duties were allowed on beverages and liquids, eatables, fuel, forage and building materials. A scale of rates was fixed, graduated according to the population, and farming out was strictly regulated. A law of 1816 enacted that an octroi could only be established at the wish of a municipal council, and that only articles destined for local consumption could be taxed. The law of 1852 abolished the 10% of the gross receipts paid to the treasury. Certain indispensable commodities were allowed to enter free, such as grain, flour, fruit, vegetables and fish.

French octroi duties were collected either by the (1) regie simple, i.e. by special officers under the direction of the mayor; (2) by the bail à ferme, i.e. farming, the contractor paying yearly a certain agreed upon sum calculated on the estimated amount; (3) the regie interesse, a variation of the preceding method, the contractor sharing the profits with the municipality when they reached a given sum; and (4) the abonnement avec la regie des contributions indirectes, under which a department of the treasury undertook to collect the duties. More than half the octrois were collected under (1), and the numbers tend to increase; (2) is steadily decreasing, while (3) has been practically abandoned; (4) tends to increase. The gross receipts in 1901 amounted to 11,132,870 francs. A law of 1897 created new sources of taxation, giving communes the option of (1) new duties on alcohol; (2) a municipal license duty on retailers of beverages; (3) a special tax on wine in bottle; (4) direct taxes on horses and carriages, clubs, billiard tables and dogs; (5) additional centimes to direct taxes.

From time to time there was agitation in France for the abolition of octroi duties, but it was never pushed very earnestly. In 1869 a commission was appointed to consider the matter, and reported in favor of their retention. Octrois were finally abolished in 1948.

In Belgium, on the other hand, they were abolished in 1860, being replaced by an increase in customs and excise duties; and in 1903 those in Egypt were also abolished.