© Reuters. FILE PHOTO: French Economy and Finance Minister Bruno Le Maire speaks during a joint news conference with German Economy and Climate Minister Robert Habeck (not seen) at the Bercy Ministry in Paris, France, February 7, 2022. REUTERS/Sarah Meyssonnier/File
PARIS (Reuters) – France can only afford to cut business tax by another 10 billion to 15 billion euros without putting its public deficit reduction plans at risk, Finance Minister Bruno Le Maire said on Tuesday.
Since President Emmanuel Macron took office in 2017, the government has cut corporate tax by 26 billion euros ($29.5 billion) since 2017, including 10 billion euros in levies that French firms pay that are tied to turnover or staff headcount whether they make a profit or not.
Nonetheless, these so-called “production taxes” remain far higher than in other EU countries, and Le Maire has repeatedly called recently for another round of cuts to make French companies more competitive.
“We can go further on tax cuts but only as far as 10-15 billion euros,” Le Maire told a business conference on France’s presidential election in April.
Le Maire said cutting production taxes by that much would be “reasonable” if France is to stick to current plans to reduce the public-sector budget deficit beneath an EU ceiling of 3% of output by 2027 from an estimated 5% this year.
The Rexecode economics think tank estimates cutting production taxes by 30 billion euros would be needed just to bring them to the EU average.
Rexecode said in a study on Tuesday that cutting production taxes should be a the centre of a new push to restore French companies’ competitiveness under the next government.
($1 = 0.8811 euro)
France can afford to cut business tax by 10-15 billion euros – minister
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.