France to consider corporate tax increase to lower budget deficit

RFI

30 September 2024 at 10:58 am·1-min read

France's new Prime Minister Michel Barnier is reportedly considering a one-off increase in corporate tax on the country's biggest companies, as the government faces a deadline on Tuesday to present a budget for 2025, which must address a spiraling deficit.

Along with increasing the corporate tax, the government could propose to tax share buybacks, as part of efforts to plug a gaping hole in public finances, the Le Monde daily reported on Sunday.

Barnier, who took office in September, faces a growing budget crisis as tax income is weaker than expected and spending higher than planned.

Le Monde says the 2025 budget, which must be presented to parliament by 1 October, could include an 8.5 percent increase in the tax rates on companies whose annual turnover is at least €1 billion.

Public auditor warns France's national finances are in 'worrying state'

It would increase the tax rate from 25 percent to 33.5 percent, or the level it was before French President Emmanuel Macron lowered it when he was first elected in 2017.

The tax would be temporary and would impact 300 companies, netting some €8 billion for the public coffers in 2025.

Other possible measures include a tax on share buybacks - companies that buy their own shares to reduce their number and raise their value.

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