What taxes have been eradicated or lowered underneath the Macron presidency? | EUROtoday

Prime Minister Michel Barnier assesses the nation's budgetary scenario “very serious”and didn’t rule out the opportunity of rising taxes. A taboo for Macronists, whereas Emmanuel Macron's two five-year phrases have been marked by tax reductions or eliminations. The resigning finance minister, Bruno Le Maire, additionally claimed, in his farewell speech at Bercy, to have achieved “55 billion euros in tax cuts.” In a report printed in July, the Court of Auditors estimates that tax cuts since 2018 have contributed to the deterioration the general public deficit: “The impact is estimated at 62 billion euros in 2023.”

In element, tax reductions or eliminations have relatively benefited the wealthiest or companies, and the vast majority of households have needed to make do with just a few measures in favour of buying energy.

Transformation of the solidarity tax on wealth right into a tax on actual property wealth

Since when? Emmanuel Macron's marketing campaign promise, the abolition of the wealth solidarity tax (ISF), changed by the actual property wealth tax (IFI), was applied in 2018.

Who is anxious? The IFI considerations tax households holding actual property property whose internet worth (the distinction between the worth of the property and any loans) is larger than 1.3 million euros on 1^er January of the tax yr. This measure advantages the wealthiest as a result of it excludes securities and investments from the tax calculation. The goal of the reform was to help non-public funding and the expansion of the French economic system.

What is the shortfall? A 2023 France Stratégie report estimates that, if the ISF had been maintained, its revenues “in 2022 would have been equal to 6.3 billion euros.” The IFI having introduced in 1.83 billion that yr, “the loss of revenue related [au] replacement [de l’ISF] by the IFI would therefore have amounted to 4.5 billion euros “, in keeping with France Stratégie.

Transformation of capital revenue taxation right into a “flat tax”

Since when? In addition to the abolition of the ISF, the 2018 finance legislation launched a single flat-rate levy (PFU) of 30%, generally known as the “flat tax”. “, for savings income: income from movable capital, dividends, property income, etc.

Who is concerned? The aim is to simplify and reduce the taxation of savings in order to make the tax system more attractive, particularly for the wealthiest. The PFU replaces the taxation of capital income at the income tax scale. The previous system, sometimes perceived as complex and dissuasive, led to progressive taxation, which could reach 60% for the wealthiest taxpayers, compared to 30% regardless of the amount declared with the introduction of the “flat tax”.

What is the shortfall? The implementation of the PFU in 2018 represents a cost of 1.8 billion euros for the State, according to the economic, social and financial report annexed to the draft finance law for 2022.

Reduction in the corporate tax rate

Since when? The 2018 Finance Act also provided for a gradual reduction in the corporate tax rate, from 33.3% in 2017 to 25% in 2022. All while maintaining the reduced rate of 15% for small and medium-sized enterprises (SMEs).

Who is concerned? Corporate income tax (IS), also known as the “company earnings tax”, is levied on the results of French companies. The reform was aimed at supporting private investment and economic growth.

What is the shortfall? The preliminary assessment of the finance law concerning the reduction in the IS rate assumed a budgetary cost of 11.1 billion eurosThe poor economic performance of taxed companies and the drop in the tax rate have also had repercussions on tax revenues: from 71 billion euros in 2021, they fell to 68 billion in 2022, a decrease of 4% according to figures from the Department of Fiscal Studies and Statistics.

Exit tax reform

Since when? In 2018, the “exit tax” was not abolished, as Emmanuel Macron had initially announced, but revised in the form of a more targeted mechanism so as not to discourage investors.

Who is concerned? “ The “exit tax” is a measure geared toward enterprise leaders tempted by tax exile. Established in 2011, underneath the presidency of Nicolas Sarkozy, its goal is to fight tax evasion by taxing at 30% the theoretical or latent capital positive factors made by French individuals who personal shares in firms (shares, bonds, and many others.) on the time they transfer their tax residence in another country. If they promote their shares inside fifteen years of leaving the nation, they are going to be taxed. The 1^er January 2019, the finance legislation lowered to 2 years the interval of holding shares after departure (from which there’s exemption from the “exit tax”).

What is the shortfall? Between 2012 and 2017, it introduced in 138 million euros to the State, and anxious lower than 400 folks per yr on common, in keeping with Bercy. While it’s tough to know the revenues of the “exit tax”, we will contemplate that the discount of the deadline implies a discount within the yields of this tax for the State. In 2022, the National Assembly voted to reinstate the “exit tax” in its preliminary model., thus lowering the interval to fifteen years, in opposition to the recommendation of the federal government. According to the Montaigne Institute, a liberal suppose tank, this restoration may usher in as much as 67 million euros per yr.

Elimination of housing tax for important residences

Since when? The abolition of this tax for the principle residence was initiated by the 2018 finance legislation, initially for essentially the most modest households, earlier than being step by step generalized to all households on 1^er January 2023.

Who is anxious? The housing tax utilized to every tax family with actual property, whether or not tenant or proprietor. Eliminated on important residences, this tax is however maintained for secondary residences for house owners or usufructuaries of furnished premises and their outbuildings. This was one of many commitments of the President of the Republic in favor of family buying energy by means of a discount in obligatory deductions.

What is the shortfall? On the native authorities facet, the housing tax represented 23.4 billion in income in 2016. But the State has undertaken to compensate for the loss. The abolition is usually offset by an allocation of income from the worth added tax (VAT) to native authorities. The continuation of the reform of the housing tax has due to this fact additional affected the State funds by means of income losses of 2.8 billion euros in 2023, in keeping with the Court of Auditors report of April 2024.

Elimination of the contribution to public broadcasting

Since when? The abolition of the housing tax introduced with it the top of the contribution to public broadcasting (CAP) in 2022. In reality, the gathering of the CAP was linked to the housing tax.

Who is anxious? The CAP, previously known as the audiovisual license payment, is a tax linked to the possession of a tv set. It financed public audiovisual providers, resembling France Télévisions or Radio France. This abolition was additionally a part of the measures in favor of family buying energy.

What is the shortfall? According to the report co-written by the General Inspectorate of Finance and the General Inspectorate of Cultural Affairs, the CAP represented 89% of the financing of public audiovisual media, and had reported 3.1 billion euros in 2020.

Abolished since 2022, it was to be adopted by a reform of the financing of public broadcasting that has nonetheless not been voted on. The short-term resolution discovered by the federal government to compensate for the loss is the allocation of a fraction of VAT till the top of 2024. And after? For the second, the talk on the reform undertaking has been postponed.

Elimination of the contribution on the added worth of firms

Since when? The price of this tax has already been halved in 2023 and may step by step lower (by 1 / 4 annually) till 2027, when it will likely be utterly eradicated.

Who is anxious? Based on the added worth produced in the course of the reference interval, the contribution on the added worth of firms (CVAE) should be paid by firms that generate a specific amount of turnover and whose exercise is taxable underneath the enterprise property tax. The goal of its abolition is to proceed the discount of manufacturing taxes.

What is the shortfall? The CVAE introduced in 9.6 billion euros to native authorities in 2021, and 9.3 billion in 2022, the final yr at full price, in comparison with 15 billion in 2020.

Since the 1^er January 2023, the product of the CVAE is collected by the State and not by native authorities. To compensate for the lack of this switch, a fraction of the VAT is once more mobilized. Thus, the loss is roughly 5 billion euros for the State in 2023 (the yr by which the speed had already been halved), in keeping with the evaluation of income for 2024.