France considering increased taxes for major companies – Le Monde
The French government is seeking to reestablish authority over public finances while preparing for the 2025 budget. Read Full Article at RT.com
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The government is aiming to stabilize public finances as it prepares for the 2025 budget.
According to Le Monde, France's new administration is considering tax increases on large corporations to address deficiencies in public finances. The proposed 2025 budget may feature an 8.5% rise in corporate tax for companies generating over €1 billion in annual revenue. These proposals, evaluated by Prime Minister Michel Barnier, include an ‘exceptional contribution’ on the profits of major firms, which would be a temporary measure expected to generate €8 billion next year.
Additionally, officials are exploring the possibility of implementing a tax on share buybacks, a strategy where companies repurchase their own shares to reduce the available supply in the market and, as a result, enhance their value. Le Monde reported that a new tax on buybacks could yield approximately €200 million, potentially targeting firms like BNP Paribas, luxury conglomerate LVMH, and energy company TotalEnergies.
Barnier’s office has refrained from commenting as the Prime Minister is set to deliver a policy speech in parliament on Tuesday, as noted by Reuters.
As of the end of June, France's public debt hit a historic €3.228 trillion, equating to 112% of the nation’s GDP, significantly surpassing the EU’s 60% guideline. Within the EU, only Greece and Italy have higher general government debt than France.
Barnier’s administration faces mounting pressure to reduce the budget deficit, which officials estimate may grow from 5.5% of GDP in 2023 to over 6% this year. The European Commission has attributed the widening deficit to sluggish tax revenues stemming from slow economic growth and decreasing inflation.
In terms of economic performance, France, the EU's second-largest economy after Germany, recorded a GDP growth rate of 0.87% in 2023 compared to the previous year. Economic activity is projected to remain subdued in 2024, with the European Commission forecasting an annual growth of 0.7%.
Budget Minister Laurent Saint-Martin indicated last week that the condition of public finances is worse than had been anticipated just days prior. Barnier, who took office earlier this month amidst protests from the largest parliamentary party, is expected to unveil his first budget by mid-October at the latest.
James del Carmen for TROIB News
According to Le Monde, France's new administration is considering tax increases on large corporations to address deficiencies in public finances. The proposed 2025 budget may feature an 8.5% rise in corporate tax for companies generating over €1 billion in annual revenue. These proposals, evaluated by Prime Minister Michel Barnier, include an ‘exceptional contribution’ on the profits of major firms, which would be a temporary measure expected to generate €8 billion next year.
Additionally, officials are exploring the possibility of implementing a tax on share buybacks, a strategy where companies repurchase their own shares to reduce the available supply in the market and, as a result, enhance their value. Le Monde reported that a new tax on buybacks could yield approximately €200 million, potentially targeting firms like BNP Paribas, luxury conglomerate LVMH, and energy company TotalEnergies.
Barnier’s office has refrained from commenting as the Prime Minister is set to deliver a policy speech in parliament on Tuesday, as noted by Reuters.
As of the end of June, France's public debt hit a historic €3.228 trillion, equating to 112% of the nation’s GDP, significantly surpassing the EU’s 60% guideline. Within the EU, only Greece and Italy have higher general government debt than France.
Barnier’s administration faces mounting pressure to reduce the budget deficit, which officials estimate may grow from 5.5% of GDP in 2023 to over 6% this year. The European Commission has attributed the widening deficit to sluggish tax revenues stemming from slow economic growth and decreasing inflation.
In terms of economic performance, France, the EU's second-largest economy after Germany, recorded a GDP growth rate of 0.87% in 2023 compared to the previous year. Economic activity is projected to remain subdued in 2024, with the European Commission forecasting an annual growth of 0.7%.
Budget Minister Laurent Saint-Martin indicated last week that the condition of public finances is worse than had been anticipated just days prior. Barnier, who took office earlier this month amidst protests from the largest parliamentary party, is expected to unveil his first budget by mid-October at the latest.
James del Carmen for TROIB News
